19th Century miners and farmers used them as pack animals as there were better suited to the arid conditions in the outback than horses. They bred them in large numbers but they were quickly replaced by petrol driven after WW1. Inevitably some escaped and others were simple deliberately released by their owners when they were ni longer needed. Left to them themselves they bred freely in the wild to produce the huge numbers seen today.
Some say they overgraze the land but in reality it is this that causes a lack of food for them and automatically limits their numbers.