Why do people even use docking stations anymore? I've never used one but I have used plenty of KVM-type devices that just work over various standard usb/display ports. What's the appeal of using the specialized "docking" port?

This is a ThinkPad USB-C docking station. I think it is basically the same as what you are talking about but if not, the main convenience is that you can plug in one cable which provides power, 2 external displays and a mouse. Super great if / when it works but not reliable with Arch (not blaming the distro specifically, it could be kernel or anything in the stack).