I bought a lot of coconut sugar (and have since given it to my MIL). I baked cupcakes with it and the entire batch of cupcakes fell (there was a crater-like indention in every cupcake). All of my cane sugar cupcakes rose nicely. In the cupcakes, I didn't notice much of a different flavor (they still tasted really good despite sinking in the middle). But when I made fresh lemonade with the coconut sugar, all I could taste was burnt sugar. Does coconut sugar normally taste burned or could it have just been the brand I bought? I can't believe coconut sugar is so popular if it all tastes burned.
Pretty much all sugar, regardless of source, has to go through a series of refining steps in order to remove moisture and produce crystals. Common white "table sugar" that we're familiar with in Western countries is the most refined, having gone through a whole series of steps to precipitate and "wash" the crystals to produce a brilliant white. This process removes the molasses, which has a very distinct burned or toasted flavor, leaving a very pure sweetness.
Coconut sugar is produced from a different source (the coconut palm, obviously) and is reduced down to produce crystals in a similar way, but it's typically less refined afterwards. It doesn't technically contain molasses, but it does have similar impurities that produce a similar flavor. In fact:
Coconut sugar is subtly sweet almost like brown sugar but with a slight hint of caramel. However, since coconut sugar is not highly processed, the color, sweetness and flavor can vary depending on the coconut species used, season when it was harvested, where it was harvested and / or the way the "sap" or "toddy" was reduced.
Brown sugar, by the way, is commercially produced by blending molasses back into refined sugar. Less-refined sugar, which can have a brown hue, is often marketed as "raw" instead.
So: coconut sugar can vary, and the specific brand that you tried may have been one with more of a bitter, burned, or caramel-like flavor. You may have better luck with another, but keep in mind that most coconut sugars don't go through refining steps that produces a very pure sweetness like you'd be used to with common white sugar.
As for why it's popular... well, supposedly it's a bit healthier than cane sugars, particularly if you're concerned with blood sugar levels. Products made with coconut oil seem to be enjoying a trendy popularity, as do alternative sugars (like palm sugar) and it's a fair bet that coconut sugar is benefiting from both fads. It all comes down to marketing.