When the Internet was mainly used by academics, no one had to protect their mail servers from relay abuse. In fact, not many people had a mail server, and so permitting others who did not have an e-mail server to relay e-mail using your server was considered a service to them.
This changed with the advent of people who soon became known as spammers. They would abuse open relays to send advertisements to large numbers of remote recipients leaving the owner of the mail server to pay for the traffic.
This is when postmasters started to handle relay permissions restrictively. They used to permit relaying only for trusted IP addresses, refusing messages from other IP addresses. A trusted IP address in this context was an IP address that could be associated statically (refer the Static IP Ranges section) with a host that belonged to a known user, or a range of IP addresses known to belong to a trusted network. It worked well as most computers would have static IP...