1. Nickle is more resistant to corrosion than blue. Until the advent of Stainless (1966) revolvers it was a better way to go if one lived in the humid South, carried close to the body, etc. During the Black Powder era it was quite popular as a much more durable finish as compared to the delicate blueings of the period.
2. Some who use handguns in a non-military/hunting capacity predict to be in situations where they do not WANT to actually shoot somebody. In such situations cooperation or flight of an adversary is, perhaps, more likely if your gun is highly visible and CLEARLY a gun. Indeed, a big nickle magnum revolver stocked with hollowpoints is far from subtle when we begin a game of Sgt Simon Says. One does not want to lose this game.
3. On a few guns, it just looks great.
4. Nickle is a little easier to clean up than blue.
5. Once stainless versions of popular guns became widely available, the need for nickle was significantly reduced. The appeal of nickle declined as well.