Plupload started in a time when uploading a file in a responsive and customizable manner was a real pain.
Internally, browsers only had the
input[type="file"] element. It was ugly and clunky at the same time.
One couldn't even change its visuals, without hiding it and coding another one on top of it from scratch.
And then there was no progress indication for the upload process... Sounds pretty crazy today.
It was very logical for developers to look for alternatives and writing their own implementations, using Flash and Java, in order to somehow extend limited browser capabilities. And so did we, in our search for a reliable and flexible file uploader for our TinyMCE's MCImageManager.
Quickly enough though, Plupload grew big. It easily split into a standalone project. With major version 2.0 it underwent another huge reconstruction, basically from the ground up, as all the low-level runtime logic has been extracted into separate File API and XHR L2 pollyfills (currently known under combined name of mOxie), giving Plupload a chance to evolve further.
Currently, Plupload may be considered as consisting of three parts: low-level pollyfills, Plupload API and Widgets (UI and Queue). Initially, Widgets were meant only to serve as examples of the API, but quickly formed into fully-functional API implementations that now come bundled with the Plupload API. This has been a source for multiple misconceptions about the API as Widgets were easily mistaken for the Plupload itself. They are only implementations, such as any of you can build by yourself out of the API.