Re: why on earth did they adopt TCP/IP.
Because ATM SONET etc are designed from the ground up to be robust and reliable and predictable (attributes of circuit switching) and the necessary boxes are priced accordingly.
Because TCP etc is designed to be "oversold" (sell more capacity than you can ever hope to deliver). That actually works surprisingly well most of the time. That's one of the differences between circuit switching and packet switching. Consequently IP networking sells like hot cakes, and in many cases is dirt cheap. And nowadays people mostly expect computery things to fail from time to time. Which of course they do, especially when badly designed and implemented.