I believe it's definitely popular due to the fad, and even hype if you will, of the 80s. I'd say Hollywood was perhaps the biggest influence with movies such as The Karate Kid and all those other Western Karate-esqe films.
As far as practibility, Karate is far from useless, but that still isn't saying much. When you compare it to other martial arts out there, it falls so short; how many people do you know who are "black belts" in Karate could actually fare decently in a real fight?
I believe Karate to give a false sense of security to it's practitioners, much like those Self-Defence for Women courses. In a real street fight, Karate just doesn't hold up unless you're a real practitioner of the art.
Perhaps the most ironic thing of all is that it's usually Karate people seem to flock to, for self-defence or whatever reason, purposely avoiding traditional boxing, when boxing (or kickboxing) is really the most useful 'art' for people to learn (in my eyes, and only to a certain level, where it's then needed to learn wresting, BJJ, etc.).
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