Back when police carried revolvers rather than semi-autos, wadcutters were normally used for practice because the lower recoil was less prone to cause a shooter to develop a bad flinch than full-power ammunition was. But they were developed for target shooting first. The reason the clean round holes mattered is the way target scores are determined is by counting all the holes that are either inside or touching a scoring ring. When the bullet hole barely kisses the outside edge of the scoring ring, it still counts as that ring's value. So it was important to score counting that the hole in the paper be as wide as its caliber allowed.
Note that precision pistol target shooting goes out to 50 yards, and wadcutters are still accurate at that distance, provided you and your gun are capable of accuracy. Using wadcutters for self-defense is an idea that has gone through phases among handloaders. For a long time, it was thought that hollow base wadcutters seated backward would be great for self-defense because the hollow would act like a giant hollow point. Well, it does, but often to the extent that the expanded skirt fragments, but not before stealing so much energy from the bullet that what remains doesn't penetrate very far. The other approach is to use hardcast double-ended or else bevel base wadcutters, which have no hollow, and load them up to full power ammunition, allowing the bullet to protrude beyond the case mouth to make room for a larger quantity of slower powder. The Lee Tumble Lube design is particularly good for this, as any of the numerous small grooves in it can be used as the crimp groove, and IME produces very small groups fired as-cast, half the size of those I get from Federal Match WC's in my K-38. Flat nose designs are thought to be a good compromise between penetration and shock and the final hole size in the target.
