Mostly for convenience I think. There's also the working-class/unpretentious image, and many people dig that. You will find many Chinese government officials drinking from glass jars in public appearances. They probably have expensive red clay tea sets at home though.
Nope, though I can try guessing. Although the material used can have a noticeable effect on the tea (both in temperature and flavor) I would think this is just for convenience. Glass is a neutral material good for any kind of tea and is easy to clean. A jar wouldn't spill easily and would be good for travelling. When most people drink tea they just want caffeine and convenience comes before taste.
They are mostly drinking green tea in those jars. Green tea brews at a much lower temperature (150-180F); indeed, since they are leaving the tea leaves in there all day and refilling it, they can use even cooler water and let it steep slowly. Heavy glass is also a decent insulator, keeping it warm all day.
For 1, porcelain is far more predictable with heat retention than most forms of ceramics. Try pouring a cup of boiling water into a handful of your favorite mugs, and note the temperature difference in a couple minutes. Or pouring less water into some (big difference then). Barring evaporated heat (prevented with a cover), a porcelain will still behave roughly the same with even 1/2 the water it could hold full.
For 2, uh... the better to sip with? * shrug * don't really know.
Ok, here comes my guess: volume. Whenever I make tea in one of those massive cups, it doesn't taste bitter after 1-3 refills. I have Chinese family over for the weekend, so I'll ask & post back here.