Wiki says sunburst came about on guitars because of an effort to give it the same high quality look as expensive violins and such from Europe. The other assertion there is that the black covered over less attractive grain. I don't know how true these are. My guess seems really off the mark--I just thought it somehow a cowboy style that caught on. Half of my guitars are either some kind of burst. When you step back from it, you see how remarkable it is that a style like that has continued and remained popular.
Does wiki's origin story sound right?