When
CD-ROM drives first came about, manufacturers realized that some data
Compact Discs would be very valuable, and would need to be protected, since CDs are "naked" and thus easily scratched.
Therefore, they came up with the CD Caddy, which is a small plastic container you put the disc into, then you insert the entire caddy into the CD-ROM drive. The caddies had a sliding metal door on them that would keep dust and dirt away from the CD, yet allow access for the drive when inserted, much like a 3.5" floppy disk. Of course, the idea was that you'd keep all your CD-ROMs in individual caddies so they'd be protected from harm, yet still usable.
The big problem is that caddies were ridiculously expensive, at $20 a pop in their heyday. This caused caddies to become incredibly IN-convenient, as people would only own two or three and constantly swap their CD-ROMs into and out of their caddies.
CD caddies eventually fell out of favor and tray-loading CD-ROM drives became the norm. It was a good idea, but lack of reasonable prices on the caddies themselves led to its downfall. Some manufacturers, like Plextor and NEC, kept making caddy-loading drives long after most others quit, but eventually went tray-loading across the board too.