One important thing that is often mistaken:
copy protection is there to prevent a legitimate customer of a game to copy his/her purchase to a friend, a neighbour, a kid, a schoolmate etc.
When people affected could not copy a game to whoever they showed it to, many of the people went and bought the game instead - we are of course not speaking about people "in the know" of piracy, but casual users, the people who these games were targeted at the first place.
A manual can be photocopied (normally), a codewheel can be ripped apart and photocopied, a disk protection (less advanced early ones) can be copied once you know how.
However a dongle no matter how simple is out of reach for many of the people who could have copied the game otherwise.
The reason dongles were rarely used was the cost involved and the massive losses that could have been gained if the success of a game was improperly forecast. (similar problem with console cartridge remittance)
A wrong sales forecast could have easily wiped out the profit of a bad selling game, while duplication was a much more controllable cost and could be done is small (few hundred copies) runs whenever needed.
Manual and packaging cost was shared among platforms in many cases, so the cost was well spread and mass reduced, of course if none of the conversions sold, it was a major loss.