College Fraternities aren't really exclusively American and Fraternal University groups and similar organizations have been around for a while. Lenin was in the Russian equivalent of a Frat, I think Marx too.

Historically, a lot of it was about social support for young men at university, many of them were far from home and have never lived alone and Universities often didn't provide housing or food as much back then, or if they did it was often poor quality, so getting into a Frat was a way to get three hots and a cot. And also they're just social clubs, you can hang with other dudes and party, make connections that can pay off later in life. Like most clubs they have weird traditions and shit. It's kind of like Boy Scouts for 18-25 year old men, so less camping and more drinking.

Weird social clubs like these used to be more common in general. Is there a weird old dive bar in your down called like "The Eagles Lodge" or the "Fools Order"? Yeah that's cuz before Xbox and Netflix it was a lot more popular to do weird shit like go to a club where you all wear Moose Hats or whatever. It wasn't even just a male or upper class thing, there were clubs for women and one's with more working class backgrounds.

The really weird shit you see now is almost more because University became more accessible, Frats became less needed and therefore more exclusive, and generally just began attracting a more toxic, hyper-masculine, often upper middle class, background of men who's rituals got more culty and destructive.