Years ago I was a Novell admin (before I saw the light with NT).
The conventional "wisdom" of doing that was to keep track of
license uses. In those days a license for Word or Excel was about
$250 each and there wasn't any bundling into a suite like Office
until Office 4.3 (or maybe 4.1, I don't remember) In any case,
even as late as Novell 4.0 admins were running off of a server to
minimize license use. That way they could buy 10 licenses for as
many as 15 or 16 users and install them per use, instead of per
seat.
Later, when Office was bundled, it was much cheaper to run
locally, and as you say, made much more sense.
I never saw Novell until I went freelance in late 1994. By that
time, the Office suites were ubiquitous, so the justification for it
was already vanishing for most of these users.
And umpty-eleven mapped drives was something I kept seeing for a
long time, and the Novell-trained techs adapted the same stupidity
when they moved to NT-based servers (in the NT 4 time frame). I kept
telling them this made no sense, but I was the lowly workstation
tech, so I didn't know anything.
This is one of the reasons I was an early adapter of pure UNC paths
and shortcuts (populating Network Neighborhood and All Users
deskstop with standard shortcuts, for instance) without any mapped
drives. We're talking 1997 for the first client I got to have a say
in planning this.
Of course, it's no good to implement that if the server shares
aren't rationally organized, which means not mapping root to your
data drive (which is something I still see to this day).