Comments by "TheGoldenCaulk" (@thegoldencaulk2742) on "Q&A 33: It's All About Compromises" video.
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It was part of their response to getting smashed by German fixed MGs in WW1. They developed a counter-tactic surrounding the use of Chauchats and rifle grenades to suppress or destroy the gun emplacements. The tactic worked so well that they made rifle grenades standard equipment.
As for why they kept if for so long, one of the big benefits of a rifle grenade over a grenade launcher like the China Lake or M79 is that, in an ironic twist, the rifle grenades are more effective than the purpose built grenades. On the topic of "It's all about compromises," one of the compromises with grenade launchers is that the barrel tube has to be of limited diameter and the walls of limited thickness to keep weight down. The added effect is that the munition itself has to be kept small, leaving almost no space for the explosive warhead itself. You ever seen an M203 HE round detonate? It's totally underwhelming, the blast is smaller than a standard frag grenade. Alternatively, the rifle grenades do not have this severe size restriction, you can make them much larger because they wrap around the smaller rifle barrel, and that leaves you with enough space to make a crazy strong warhead. Imagine instead of an underpowered grenade, you have an underpowered mortar shell.
There's also the logistical advantage of not needing an extra piece of hardware that you need an extra man to carry around. A given squad is already gonna have rifles, so just make them carry a set of launching cartridges which take up little space, and a few rifle grenades each, and you've vastly improved their effectiveness and flexibility over having one guy who's specific job is to man the grenade launcher.
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