being able to label musical pieces into categories is a helpful tool for tracking the development and shifts in music overtime...

Categorization is a very problematic thing. However, as you mention, it is a very useful tool in the study of the arts (all of them). It has also been very important in music theory.

We see forms of categorization since antiquity, with Greek philosophers discussing how music using some specific scale has deep effects in the character of people (and is therefore something that should be addressed for the well being of society). We see scales and texts being used to categorize religious music in the middle ages. We see medieval and renaissance composers producing different types of musical works, and theoreticians trying to explain how each type of work is supposed to be composed.

Musicians have produced different types of works for different occasions, different genres of dances and what not. Music was recognized as coming from somewhere else (in the Italian/French/German style, or whatever). It has not been just one big ball of standard music. We now see lots of subcultures, and many of those have particular musical expectations. From that point of view, the past looks way more uniform if you only look at one decade in one specific place. We don't see such specific genres as "post atmospheric medieval Norwegian metal" in the late 19th century. But we certainly find people saying there were different types of music.

popular music which is intended for consumption and distribution - simple singable tunes and melodies

That is not new, that kind of music certainly existed in the past. It coexisted with the grandiose operas and piano concertos. Beethoven composed that kind of thing, people were playing, singing, and dancing that at home. There was no shift from classical to popular music, popular music is not new. There was a time when both types of music shared a lot of elements, but we saw them diverge faster and faster for a while (I think they have come closer in the last 50 years or so).