drives first came about, manufacturers realized that some data Compact Disc
s would be very valuable, and would need to be protected, since CDs are "naked" and thus easily scratched.
Therefore, they came up with the CD Caddy, which is a small plastic container you put the disc into, then you insert the entire caddy into the CD-ROM drive. The caddies had a sliding metal door on them that would keep dust and dirt away from the CD, yet allow access for the drive when inserted, much like a 3.5" floppy disk. Of course, the idea was that you'd keep all your CD-ROMs in individual caddies so they'd be protected from harm, yet still usable.
The big problem is that caddies were ridiculously expensive, at $20 a pop in their heyday. This caused caddies to become incredibly IN-convenient, as people would only own two or three and constantly swap their CD-ROMs into and out of their caddies.
CD caddies eventually fell out of favor and tray-loading CD-ROM drives became the norm. It was a good idea, but lack of reasonable prices on the caddies themselves led to its downfall. Some manufacturers, like Plextor and NEC, kept making caddy-loading drives long after most others quit, but eventually went tray-loading across the board too.