I don’t have decorative towels in my bathroom. I have, as @zenvelo points out, guest towels.
Unfortunately, I have had guests say, “Oh, those towels are too nice to use! I grabbed one out of the closet.”
People have fancy towels for guests because we want them to feel like Trumps when they visit. Every-day means factory new and no repercussions about leaving orange stains all over the soft goods.
It’s not been that long ago that almost all people had rooms in their house that they didn’t use. Parlor transformed into formal living room. We ate in the kitchen, dined in the dining room when I was a kid.
Okay, I’ve gone on long enough that I’m modifying my answer.
”Decorative” towels are a throw-back to a nostalgic, genteel age (yeah, it was largely fueled by slavery and robber-barrons in America, but we digress) when guests were treated to the best we could afford to exhibit.
Then there’s the narcissistic “I like Ike” generation who’s baby-blue-and-pink poodle motifs spawned. Me.