IIRC it mostly stemmed from a lot of US tv channels not being available in Canada at the time. So to make them available, they started hacking satellite descramblers and Direct TV cards. Then they found a giant market in the US willing to buy these boxes and cards to get free tv.
There were people in the US making them too, but the Canadian stuff was more reliable and updated quicker when Direct TV changed codes.
We had a big ass satillite dish in the backyard when I was growing up, and I remember my dad needing to input these codes every so often to unlock a bunch of channels.