All income taxes have always been applied to citizens and not territory. It is due to xenophobic patriotism — you know, the kind that conservatives like to fling at you if they suspect you don’t support your country, the flag, the military, etc.. Conservatives of the late 1800’s didn’t like expatriates “shirking their duty to the motherland”, so made sure to tax them from the very outset.
Non-repatriated foreign profits of a U.S. subsidiary have always been exempt from taxes, so its not about revenue maximization. Don’t geek out about this stuff in terms of optimality — that’s purely an informed, modern perspective. Income taxes have always been first and foremost about funding politician’s wars and later on, correcting perceived social inequalities.