To me the idea of working on (non-docked) laptop always seemed like an idea that you would do only if there is no other possible way.

Screen is small and is only one. Ergonomics is entirely messed up. Either your screen is too low, or your keyboard is too high. Keyboards are non-ergonomic and have to be made with compromises due to height limits. Touchpad instead of mouse/trackball is compromise for many - and also stuck at one position.

And yet they have somehow spread despite number of people going on business trips not really increasing.

You can dock your laptop at work, then dock it at home, take it with you to a meeting room at work to browse supplemental materials and/or project your screen n the meeting, and use it for the occasional trip (like using it on the train to work).

It's not like you have to be on a plane for the portability to be useful.

It sounds like you don't code much in bed or with your feet up.

A laptop is a distinct tool from a desktop and if you try to use it like a desktop, I agree it is a terrible substitute. Personally I find laptops vastly more ergonomic than a desktop, but I never program with my feet on the ground.