People tether their dogs for a variety of reasons. Most people who do this are unaware of the harm it can cause to their dogs. Social norms of pet-keeping have made tethering unpopular, so it is declining as a practice, but some reasons people do it include:
The dog is a repeat escapee and the owner has run out of ideas to safely confine the dog. Sometimes this is the reason dogs are kept on heavier chains—they have chewed through or otherwise escaped lighter tethers and the owner is trying to keep them from getting loose.
The owner is trying to protect his dog from something on the other side of their fence (kids, another dog, etc.) by keeping the dog in one area in the yard.
The owner's fence is damaged, or the owner doesn't have a fenced yard.
The dog's behavior makes keeping him indoors challenging, and the owner doesn't know how to correct the behavior.
The landlord may not allow the pet owner to keep the dog indoors or install a fence.
The pet owner comes from a family that always tethered dogs, and may never have realized there were better options.