Altcoins provide an outlet for high time preference people. If they didn't exist we'd have even more in-fighting.

Sh$tcoins act as a test net for BTC

Devs might have different ambitions. Some might like to experiment more. Some might want to make their own block chain from scratch as an ego thing.

I think short term it holds bitcoin back from the capital that should be stored in the network, but it more so rewards those who can see through the fog and it shows who is honest and who is here for a cash grab