This post illuminates two ways in which users' expectations of computers have changed since the '80s, which is when this UX was designed:
1) Users don't deal with external storage nearly as much anymore, so the "disk image" paradigm feels out of place. Before the Internet, it was more common to insert a floppy disk, drag the application from the disk to the hard drive, and then eject it again. Users were accustomed to opening and ejecting disks based on the icons on the desktop, so when disk images started to be a thing, it worked exactly like floppies did.
2) Users think of applications that have to be explicitly installed, rather than just copied, like any other kind of file.
The second one is the really surprising one: when we think of how to get applications onto our computers these days, the word is "install". You need to install a program before you can start using it. On Windows, you ran an installer program. On Linux, you ran a command. How else can you do it?
But on Classic Mac, an application was just a special kind of file, which you could drag, drop, and manipulate just like any other kind of file.
It didn't even need to be in the Applications folder! You could put it in a subdirectory, you could put it on the Desktop, you could put it wherever you liked, and it would work just the same. I think it's a darn shame that this isn't a guarantee anymore. The other day, I tried putting all of the Microsoft Office applications into /Applications/Office instead of just in /Applications, and the next time the Office updater ran, it installed into /Applications, even though that's not where the apps lived, so now I had two copies of everything. Bleh.
Why is this so much better than running a program or running a command? Well, think about how you would uninstall a program. On Windows, you'd have to run an uninstaller or find the entry in Add/Remove programs; on Linux, you'd have to run a different command. In both cases, you'd have to do something you hadn't done before — you have to know how to do something before you can do it. On Classic Mac OS, you can just delete the application by dragging it to the Trash — something you already know how to do.
Anyway, I'm not defending this approach to installing applications. But I do think it made sense at the time, and the computing landscape changed around it.