I first heard about SCORM when I was working for a software company that created collaborative learning tools for higher education. We were using Microsoft Word to create SCORM compatible content. This was back in 2006 and I remember a lot of folks did not understand the value of converting content to SCORM because it seemed so outdated and there were much more current development projects that needed to get done. It wasn't until I got a job in corporate learning that I realized just how important SCORM was.
SCORM itself is outdated. It is pretty boring and uncreative. But it is still one of the best ways to develop content to play in an LMS without getting in a long term (potentially abuse) relationship with the LMS vendor. Of course LMS vendors want you to develop content in their system because they don't want you to ever leave...ever!
SCORM allows corporations and content developers to create content that will work with multiple learning management systems. However, as the value of the LMS diminishes, SCORM needs to be re-engineered. Project Tin Can is making an attempt at this. Learn more at my post Building the Next Generation of SCORM.