I'm not gonna pile on yet another explanation, as others have already done, but hope I can provide an example that is IMO less bizarre and ear-damage inducing: The 2005 film "Me and You and Everyone We Know" had its score[1] largely composed using a circuit-bent Casio SK-1[2].
Circuit bending is the practice of modifying the electronics of musical instruments and toys that where never intended to be musical instruments in the first place. One common techniqe is to find the clock source of whatever microchip there may be and adding a way to change the clock rate. This can make for example furbys into tunable singers. Check out Look Mum No Computers furby organ on youtube for example.
As for why it's used by all those famous musicians: I'd take that statement with a grain of salt, it's not like any of them used the SK-1 as their main instrument. But lots of people use limited and quirky stuff as inspiration, or for getting single unique sounds to mix into their works.
> if it is so terrible why have blur, beck, et al all used it?
Though the potential is generally limited, you can get surprisingly fun sounds from weird or bad gear. It's not like anyone is using an SK-1 as their main instrument for much of a full song, let alone an entire album
[1] https://www.youtube.com/watch?v=xtElSNMkums&list=OLAK5uy_kei...
[2] https://en.wikipedia.org/wiki/Me_and_You_and_Everyone_We_Kno...