Letterboxing (black or grey bars on the top and bottom of the TV screen) and pillarboxing (similar bars on the sides) serve an important function: They present the content in its correct aspect ratio — the way its creators intended it to be seen.
An aspect ratio expresses the difference between the width and the height of a rectangular frame or screen. Film and television technicians use different systems for noting aspect ratios. Therefore, the movie aspect ratio of 1.33x1 (meaning its width is one-and-a-third times its height) is identical to the television aspect ratio of 4x3.
That's the ratio of standard definition televisions, and thus the correct one for all older and some current TV shows. Only pillarboxing can present these shows correctly on an HDTV. Of course, anything shot for high-definition fills the HDTV's 16x9 aspect ratio just fine.
Things get more complicated with movies originally intended to be shown theatrically. Movies shot before the widescreen revolution of the 1950s standardised on that 1.33x1 shape (and shapes close to it; I'm generalising here). TV intentionally adopted it as well, calling it 4x3, so that movies could be easily broadcast. But the movie studios originally saw TV not as a market but as competition, and widened the big screen to make movies bigger and better than TV. Many widescreen formats premiered in the 1950s, and two became the new norms: standard widescreen (1.85x1) and scope (short for the original brand name, CinemaScope, 2.35x1). For more than 50 years, every theatrical movie has been shot in one or the other, and every theater can project both.
Standard widescreen fits very nicely into an HDTV's 16x9 screen — not a perfect fit, but close enough. But scope films must be letterboxed to be shown properly on an HDTV.
Personally, I would have preferred HDTVs with a 7x3 aspect ratio. That would have required pillarboxing for standard widescreen, but would have eliminated the need for letterboxing altogether. After all, the wider screen is supposed to be the wider screen.