Cocaine was isolated from the coca leaves in 1859 by Albert Niemann, German chemist working at the University of Göttingen, who developed the method of extraction and described the process resulting in production of cocaine hydrochloride in his doctoral thesis titled Über eine neue organische Base in den Cocablättern [On a New organic base in the coca leaves]. The process developed by Niemann is pretty much used until today and when the cocaine gained popularity as an recreational illicit drug, these methods were brought back to South America to mass-produce either the drug itself or the half-product to be refined later in manufactures belonging to the drug wholesalers.

Somewhat unexpected presentation of the cocaine-making process that has been described in the original question might have a didactic undertone stemming from an attempt to show drug production as an unattractive or even explicitly dangerous process and thus dissuade potential consumers from using that drug, but other than that it is pretty much a realistic depiction of a low-tech methods used to manufacture cocaine. The latter, being a tropane alkaloid that is naturally present in relatively low amounts in the plant material, must be extracted and concentrated to create an easily administered and potent product. This requires physical fragmentation of the material, washing the alkaloid out with organic solvents, removing the useless fractions and then reducing the resulting substance into paste and finally into powder that can be easily insufflated (snorted), injected, or evaporated and inhaled. And it only stands to reason that in the relatively poor areas when the coca leaves are planted and harvested, local farmers who manufacture cocaine paste as an auxiliary or even the main source of income do not have access to complex equipment or laboratory-grade chemicals and thus must resort to stomping the leaves or mulching them with a string trimmer and using cheap and accessible reagents, such as cement and gasoline in place of e.g. sodium hydroxide and diethyl ether. This is pretty much a difference of an alcohol produced in a makeshift still made of old pots and plumbing elements and one made in an electronically-controlled still with a fractionating column. No rewards for guessing which setup is more common in remote Siberian villages.

Popularization of cocaine outside of South America began largely with the a paper Sulle Virtù Igieniche e Medicinali della Coca e sugli Alimenti Nervosi in Generale [On the hygienic and medicinal virtues of coca and on nervous nourishment in general] written in 1859 by Paolo Mantegazza, Italian neurologist and surgeon who tested the leaves on itself and satisfied with the stimulating effects, praised coca as a 'wonder drug'. His work has been quickly followed by the introduction of the coca wines that gained popularity in early 1860s, after Angelo Mariani, a French chemist, introduced Vin Tonique Mariani. This product had a proprietary recipe, but a French regulations and guidelines concerning the manufacture of coca wines stated that the product can be made by macerating 60 g of fresh coca leaves in a litre of wine with 10-15% alcohol content. Given that the average content of cocaine is 0.7% in dry leaves of Erythroxylum novogranatense subspecies (popular in Bolivia, from where the material was imported to France), then even with a perfect extraction (that was definitely not a given, although ethanol presence and an acidic environment were quite conducive to such process), a single 750 ml bottle of a coca wine would have contained no more than 315 mg of pure cocaine (for comparison, a single 'line' of a good quality cocaine powder contains 50-60 mg of the alkaloid). This value is highly unlikely however, given that cocaine content tends to deteriorate quickly after harvest, so after being transported to Europe, coca leaves would have contained far less cocaine that freshly harvested specimens.

The true explosion of interest in cocaine started however two decades later. In 1880 Vassiliy von Anrep, a Russian army physician, at the time working with Prof. Michael Rossbach in Wurzburg, demonstrated efficacy of cocaine as a local anesthetic and a nerve blocker. Four years later, in 1884 year Sigmund Freud published his paper Über Coca [On coca] where, similarly to similarly to Mantegazza, praised the substance as a 'miracle drug', while Carl Koller, Austrian ophthalmologist presented cocaine as a local anesthetic in his line of work. and American doctors William Halsted and Richard Hall conducted successful the nerve blocking experiments. The demand for the drug skyrocketed, with Merck, biggest producer of cocaine in Europe, increasing its annual production almost fifty-fold, from roughly 1.5 ton in 1884 to 72 tons in 1886.

It should be noted that cocaine was very common as an ingredient of 'patent medicines' that were almost completely unregulated and thus could have been introduced into market freely, without any tests corroborating claims of their manufacturers and sellers. This, as one can imagine, led to a vast popularity of more or less medically useless 'snake oils' that might have even not contained any of the substances advertised as ingredients. Between the modern medicine still in their nascent and relatively low availability of medical knowledge among general population, it was almost impossible to verify the efficacy of 'patent medicines'. This might, however, explain to some extent the popularity of cocaine-based preparations, as the stimulating and analgesic effect could have been construed by patients as the signs of recuperation, especially among the working class, as it allowed continuing work even though the underlying causes of an illness might not have been alleviated. In other words, if patients started to feel better, they often considered it a sign of healing. Medicines containing cocaine were also advertised as efficient cure for cough and sore throat, largely due to the constriction of mucous membranes and reduction of mucus production what was a desirable effect, especially for people whose work or lifestyle required frequent speaking. Even though the cocaine was generally unable to heal the underlying causes, such as cold or flue, the remission of cumbersome symptoms was largely considered a good proof of a healing effect. Similarly, cocaine preparations were advertised as anti-dandruff agents, although their efficacy was most likely limited to the alleviation of the itch (although the preparations themselves might have been efficient due to the presence of other ingredients).

Of course, even if we notice that cocaine was very unlikely to treat any medical problem and posed an addiction risk, we can't dismiss its usage as an analgesic and anesthetic, because these drugs have their usage, especially in various forms of surgery. This also extended to the new area of the latter that emerged in late 1890, namely the cosmetic surgery, where general anaesthesia was not necessary, especially given the intrinsic risk of pulmonary paralysis due to the overdose of chloroform or the explosion hazard typical to extremely flammable diethyl ether. Small doses of subcutaneously injected cocaine were also used by Sutherland Macdonald and George Burchett, the first tattoo artists that opened a publicly accessible parlours in London. The stimulating effects were also appreciated in everyday activities, as another manufacturer selling the drug under the same name stressed its the efficiency in 'Hunting, Shooting, Fishing, Cricket, Football, Boxing, Rowing, Running, Riding, Swimming, Bicycling, Tricycling, Racquets, Lawn Tennis, Billiards etc.'

In addition, much like amphetamine derivatives, such as German Pervitin and American Benzedrine produced in 1930s, cocaine was also used as a stimulant in military setting, being produced e.g. in Great Britain as an aptly-named 'Forced March' brand of tablets. In this particular case, the tablets contained an extract of kola nut and coca leaves, and thus containing both caffeine and cocaine for, as the label of the preparation manufactured by Burroughs Wellcome & Co. said, 'allaying hunger and prolonging the power of endurance'. However, the increasing number of addiction and poisoning cases brought about by the unrestrained usage of cocaine led the British authorities to issue an Defence of the Realm Act or 1916, where it was made a felony to sell the cocaine or opiates in any form to men in active service without proper authorization.

So, to sum it up, popularity of cocaine in the late 19th and early 20th century was largely caused by its stimulating and analgesic effects that could have been taken as the sign of healing process, as well as the fact that many customers found the stimulating effect desirable. This said, it should also be noted that cocaine did and still does have a limited usage in the field of medicine, chiefly as the topical analgesic.

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Karch, S.B., A Brief History of Cocaine. Taylor & Francis, Boca Raton 2006.

Worth Estes, J., The Pharmacology of Nineteenth-Century Patent Medicines, in: Pharmacy in History, vol. 30, no. 1 (1988), pp. 3-18.