Soft materials on walls is actually a very old tradition. Think tapestries, drapes and curtains. They provided a variety of benefits from different thermal comfort functions to acoustics to just feeling more cozy than hard and rough materials. The acoustics of contemporary environments is a noticeable problem. The move away from a variety of softer materials, from wall coverings to things like table cloths, has made spaces louder. Fine dining establishments have found this out the hard way as their atmosphere suddenly goes from quiet to raucous with a remodel.