You can catch steelhead on yarn tied to a hook with leader material; however, I like to have nice looking flies and yarn on a hook just doesn't do it for me.
There is also the evolution of angling methods. People have been fly fishing for steelhead on the west coast since the early 1900's. Many of the early steelhead flies on the west coast were very crude and poorly proportioned, etc. They have come a long way since the late 50's when folks like Glasso started to tye very effective and beautiful flies for steelhead. Also, very few of the west coast steelhead rivers have fishable populations of resident rainbows, so fly fishers fished for steelhead and not trout in most of the rivers.
The midwestern steelhead fly fishing is very young in comparison to the west coast. And the midwestern fly fishers were used to fishing for trout in the same rivers that they then fished for steelhead. They did not know how to catch steelhead (I remember reading Swisher, Richards, and Whitlock talking about using weighted nymphs to "match the prevelent insect life to intice steelhead".) The fly fishers saw folks using spinning and casting gear adding lead weight to their lines and fishing with eggs, yarn, or other such things. Therefore, the midwestern fly fishers adopted the spinning and casting methods of adding weight to their leaders with glow bugs to imitate eggs or weighted nymphs and began the "chuck and duck" so prevelent in the midwest. Does it catch fish, yes. Is is a lot of fun to chuck and duck all day, nope. Can you catch midwestern steelhead with swung flies like the west coasters do, yep.
I even use classic married featherwings for winter steelhead. In fact, I donated PURPLE EMPERORS to the Skagit River today. No biggy, I always expect to lose at least one fly each time I fish sink tips. There are plenty of roots, branches, rocks, and assorted other objects imbedded in the river bottom to grab a fly and not let go. It is the price of fishing. I prefer to fish with well-proportioned and aesthetically pleasing flies so I fish speys, dees, G.P.'s Ally's Shrimps, and classic married featherwings.
Are my flies more effective than yarn, probably not; but they look a lot nicer. Besides, tying them gives you something to do on cold winter nights.