As for why wayland was initially CSD-oriented, I guess, it's because this is easier for compositor. Server side decorations would require a lot of additional work: make a way to change title, configure supported buttons, borderless popups, window resizability... oh, let's just push those things to toolkit and let them worry about that. More work for toolkit, less work for compositor. Compositor authors should obviously want to make their work easier. :)
I wonder how wayland is going to allow sane tiling with client side decoration. IMHO, it's either good tiling support or CSD.