There are multiple reasons for companies to release their game in an episodic format, these reasons include things such as:

• Companies can get money for the whole game before game is completed (granted usually they also offer the chance to buy a single episode as well), basically an early access but instead of waiting for potential features and adjustments consumers get fully polished content every once in a while. Though I can't recall any episodic release ending up as abandoned projects so there's that.
• Companies get to market the game with every episode release. For example episodic games have showed up on game stores' front page "Game name here something - Episode 3 is out now!", if a company would want to market a game that's non-episodic release they'd either have to start a proper marketing campaign or release additional content otherways, this way they get to market the game multiple times even before the game is done.
• Companies can get vital feedback and make changes in the future episodes based on that information.

As for what's the point of a consumer to buy an episodic game before everything's released? Well for example: * Consumer gets to play the game as soon as things are out, if the episodic game had been released in the non-episodic format the game could have been released much later. * This applies to indie devs mostly but episodic release could also help fund the future episodes so without the release format the game could potentially never have been made. * Could potentially help the development of the game by giving out feedback based on the episodes

As for why it'd be better for consumer to wait till the game's fully out:

• Usually the game gets discounted heavily once later episodes have been released. It's nothing unusual to see a game get discounted 50% or even 66% once the final episode gets released.
• More to play at once. Especially in story based games the waiting between episodes can be many months and it may affect the game enjoyment in a negative way, if you wait till all episodes are out you can just play through all of them at your own pace.