Initially, there was also a college/university requirement. You had to be in a Boston area university. Then they added Ivy League schools. Eventually, any school with an email address ending in *.edu.
https://www.theguardian.com/technology/2007/jul/25/media.new...
At the time, many were under the impression it would continue as such to prevent the proliferation of middle school/high school students from joining and contaminating the site like MySpace.
Back then, MySpace had some horrible user interface experiences. Users would add javascript plugins and themes to their pages that provided too much individuality. At times, the changes were so drastic you could not tell if a user's page was on myspace without looking at the URL.
To this day, Facebook carries a signature look & feel and will never allow any drastic changes to the UI to accommodate a user's distinct style.
Googling around, it looks like this lifting of the .edu restriction happened eleven years ago in 2006, around two years after FB launched in 2004. Contrary to your own declining experience, this was actually before FB became relevant to masses of people around the world. Most of the FB history and success has taken place "post-edu" now.
Requiring people to have .edu addresses ranges from being bat shit crazy to crudely elitist, unless it's just intended as a temporary limitation as part of a pilot launch, which is what it looks like this may have been?
I'm actually quite surprised to learn about this bit of Facebook history.