Lo-Fi dates back to the mid-70's when Punk music hit the scene. They were reacting to what they perceived to be over-engineered prog music such as Pink Floyd's

Lo-Fi dates back to the mid-70's when Punk music hit the scene. They were reacting to what they perceived to be over-engineered prog music such as Pink Floyd's Dark Side of the Moon. Nowadays it's a reaction to DAWs (Digital Audio Workstations, e.g. ProTools, GarageBand, etc.) and playing perfectly "on the grid." There's an emphasis on going back and recording "live" (everyone playing together rather than tracking separately), letting the tempo vary naturally, and not trying to make everything perfect. The upshot? People like it better.