By the late 1800's parlor guitars were popular because they were a portable musical instrument that was relatively easy to learn and served the many types of folk music well. Banjos and other similar African folk instruments were also rather common. Different forms of Dulcimers were also common. It is generally accepted that those stringed instruments were sometimes tuned to open chords because even today it is a natural tendency for those teaching themselves music on them. Guitars were taken into many weather environments not well suited to their longevity, such as agricultural field hand environments and along the trails west into the Frontier of the U.S.A. Since Guitars were not always as stable to weather changes back then as they are today, they sometimes became difficult to finger as the necks bowed and the strings raised farther from the fretboard. That high string action lent itself to promote "barring" the strings with objects such as pocket knives, combs, spikes and such. It is known that by the late 1800's it was not uncommon to see people playing Guitars and even Banjos by SLIDING such objects up and down the strings with one hand while picking the strings with the other hand.
In 1885, Joseph Kekuku, an 11-year-old student at Honolulu's Kamehameha School for Boys experimented with ways to make different musical sounds on his Guitar. One day while walking along the railroad tracks, he picked up a bolt or spike and slid it across the strings, effecting one of the first known characteristic sounds of steel and slide guitar.
For the next 7 years, he mastered unique sounds with a hair comb, a tumbler, and finally a smooth steel bar made in the school shop, similar to some still used today. Until his death in Boston in 1932, Kekuku toured the United States and most of Europe teaching and popularizing the Hawaiian Steel Guitar. In the 1930's, Sol Hoopii became another famous, foremost and premier Hawaiian Steel Guitarist, who inspired Jerry Byrd to carry that banner which he still does today.
The profound popularity of Hawaiian Steel Guitar gave rise to that instrument and style being integrated into other sytles of music, particularly Country Music and Folk styles.
By the 1930's, SLIDING the strings had developed into 2 distinct techniques; One was the Hawaiian Steel Guitar style, and the other was the Bottleneck style popular among Folk Guitarists, particularly Folk Blues Guitarists.
By the 1940's, Blues Artists such as Robert Johnson and Hawaiian Steel Artists such as Sol Hoopii were popular on records playing the sliding style Guitar. This, along with the Moving Picture industry's use of both styles, guaranteed the promotion and success of both sliding styles. This method of playing Guitar was so moving that Sol Hoopii, already famous on records and movie sound tracks, was often called in by Hollywood execs to play his instrument aside-stage to help actors express emotions such as crying onstage! And even today, Robert Johnson is regarded by many, if not most, as the greatest Blues Guitarist of all time.
I cannot separate Steel Guitar from Slide Guitar because I play both and revere both equally; And where the 2 overlap is simply impossible for me to define. It is also impossible for me to list the countless Musicians that have more recently become Masters of Slide and Steel Guitar; But along with Lonnie Johnson and Bonnie Raitt, who are regarded as 2 of the best by such famous Bluesmen as BB King and John Lee Hooker; Famous names that come to my mind are Jerry Byrd, Sonny Rhodes, Tom Morrel, Buddy Emmons, Jr. Brown, Ken Emmerson, Bob Brozman, Jimmy Page, Duane Allman, Ry Cooter, Joe Walsh, Gary Gilmore and Warren Hanes ...TO NAME A FEW.