Popular music labels have been growing steadily over the last 50+ years.
Rock itself used to called rhythm & blues way back when. But that changed.
In the 70s, we had disco...now it's either 'dance', 'club' or even just 'pop'.
I agree that w/ many genres, the labels change w/ the times to describe the same thing, as you said.
But I do think that by the 70s, things started getting complicated when rock music began to branch off into several sub-genres. (eg: shock rock, prog rock, punk, soft rock, heavy metal, etc)
They are completely outta hand today, probably b/c musical styles are constantly evolving.
There really is no use in trying to stomp it out, b/c as a culture, we actually *love* to label.
Personally, I think many times music labels CAN be useful when used right. For ex., if someone is trying to describe a band or artist to you, a label can be a huge help in giving you an idea of what you'll hear.