It was not for security. Ever.
Credit Cards were introduced as a less-secure-but-more-convenient-check.
The store then would have a stock of "blank checks" with absolutely no security features where they would imprint with carbon paper and a pressure roll the credit card information and pretty much "mint" the client a check on the spot.
Over time the raised letters for the crude minting press morphed into a magnetic strip, but the process was still 100% the same. Outside of the US in the last decade (2yrs in the US) some little security was added with encryption keys and PINs. Which is nothing more than a digital signature the bank may or may not check (like it did with the actual signature on the previous mentioned blank checks minted by the store). This is the step that was compromised with the stolen keys. In other words, the few places where you have to insert your card chip into a reader and type a pin had their security degraded to the same level as places where you simply use your magnetic strip or type your numbers on an online store.