I'm not quite that old, but didn't people look down on cassettes due to their lower audio quality? Weren't most home systems (hi-fis) still vinyl or 8-track for a while longer?

A big driver of cassettes then was the write ability, unlike 8 tracks. You could borrow your friend's new vinyl album, pop in a new cassette tape on your hi-fi, and record a copy of the album to the tape. Of course the Walkman then made listening to your new album fully portable.