ico are old formula of crowdfunding but ico concept emerged really big like no one imagined with etherum based erc20 smart contract now we can see many coins coming up under ico concept
It's because there are too many organizations of small companies that cannot put their back on their new crypto projects that's why crowdfunding or ICO is a must to gather more funds in order to develop their crypto product or projects and offer it to the public.
Ethereum based smart contract is more transparent and more reliable that's why most of the new altcoins today were based on ERC20 blockchain backbone.