That's correct, yes. They're called ESP hacks or wallhacks.
Me either. I have a hypothesis though. Online gaming in the era of dedicated servers, both for FPS games and MMOs developed a sense of community among gamers. With increased automated matchmaking and global servers, everyone loses a sense of identity. Since playing online games without any sense of personality is the worst experience a human can endure (/s of course), people latch onto streaming as the only way to make these hellscape games feel even remotely like a human experience.