Closed-loop thermal management a.k.a. "throttling" was an inevitable consequence of the invention of SpeedStep.
I recall 3 different stages, thermal protection was first designed to save chips if the cooling fans failed etc. It was very conservative because the only option was to turn the system off. SpeedStep was designed to save laptop battery life, so they never needed to thermal throttle in normal operation.
Only fairly recently with Turbo Boost did Intel combine both ideas. It’s actually a fairly clever optimization as single threaded workloads benefit quite a bit from the extra thermal overhead.
The Pentium III was the last Intel CPU where shutdown was the only possible response to overheating, when the CPU asserted THERMTRIP#. The Pentium 4 has bidirectional PROCHOT# and the Thermal Control Circuit, which divides the clock down whenever the processor is hot, and continues to run.
I had forgotten about P4 style thermal protection, but that wasn’t supposed to trip in normal operation the way SpeedStep and Turbo Boost is.
It's also what enables some of the more modern packaging technologies.
Silicon aging is worse at higher temperatures, people are going to kill their 7/10nm chips far quicker if they keep overclocking as they've previously done. But that'll be Big Silicon's fault too, no doubt.
They added thermal throttling because most users only max out their CPU a tiny fraction of the time so the thermal inertia can compensate for inadequate cooling. It’s infrequent enough that most users could even disable it without noticing a difference. The problem is under the wrong conditions Aka inadequate cooling plus high ambient temperatures plus extreme workload = dead CPU.
And no this isn’t theoretical, one summer working without AC I cooked a CPU before they added thermal protection. It actually happened to several people in the same heatwave.