Regarding why it is a thing:
here you go. Basically, some activists started doing it in 2015 as a way to normalize the LGBTQ+ community with a generation whose biases have not yet formed, reassure young children who may be part of or inclined to join the LGBTQ+ community that they were not alone, do something nice for kids/the community- pretty standard stuff.
For what it's worth, drag performers also seem uniquely well-suited for the job: they are performers, they're used to reading cues from the audience and adjusting/responding accordingly, they tend to dress and act in attention-getting ways that seem to appeal to kids (bright colors, unusual style choices, etc).
Basically it was just a nice, inclusive thing in some of our major cities and a few other places for a while. Nobody really cared about it one way or the other, at least not any more than we cared about other events for kids in the city. Then the far right found out about them and it was culture war time, and, well, here we are.