It exists for legitimate reasons.

Take for example a business with five phone numbers:
555-1210, 555-1211, 555-1212, 555-1213, 555-1215

You only publish the main number 1210. You want any calls made from all your numbers to show your 'main' number so people don't have to worry about recognizing five numbers when you call them.

Therefore the 'back' four numbers all spoof your primary phone number and you build recognition for your phone number.

Another example is those emergency phones you used to see at the pool in every apartment complex. Lift the handset, it calls an emergency number and is unable to receive calls. Those would usually spoof the number of the management so emergency services would have a phone number to use for contacting someone on site.

Separately, removing the feature from the switch doesn't quite work like that.

There are around a dozen ILECs in the US alone. Those are the 'big guys' who tend to own their loops. There are hundreds of CLECs in the US. The ILECs have a pile of switches and most of the major CLECs have a switch or five.

The caller ID feature is a bit of information passed from switch to switch as an outgoing call is routed from its source to its destination potentially passing through any number of switches. Each ILEC and CLEC have an agreement where they pass this information along for various reasons.

The trick is that if a call originates from a VOIP call, they fake the information being sent and pass it through the VOIP company's switch to the next switch along to the destination, each of which trusts that the previous switch is only passing legitimate data.

So by the time the spoofed information hits the destination switch, it only has the faked call information passed from the other switches.

There was talk before I left the phone company I worked for about enabling method to prevent untrusted switches from passing calls or to flag those calls as untrusted, but getting all companies in the US to sign on to that much less getting every company in the world to sign on to that seems... unlikely.

Please note that this information likely has changed in the decade I've been out of telecom, but it should give the general idea of what's going on.

The issue is that in some cases, specifically trunking and VoIP, there is no originating number. In those cases, spoofing is required for something to be displayed. The issue is that scammers will put anything there and will often change the spoofed ID on a regular basis so you can't block them out permanently.

This is it exactly. I used to work for a telco and it was explained to me that all of the 'taxes' we listed on the bill were costs that the telco was billing the customer for because the telco had to pay them and not because the customer had to pay them.