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When I first started working in Drupal, I created all my sites on a staging URL (like newsite.tzk-design.com) that lived as a subdomain of my studio website. Updating a module meant downloading the project from drupal.org, unpacking and uploading it to the staging URL, then running updates manually on the server. Theming meant making changes to a file, uploading it to the server, and refreshing the page to see changes.
While this is a totally reasonable way to work, there were a few problems with it:
Depending on my Internet connection or the size of a file, uploading files to a server took a significant amount of time—particularly when you add up the time spent tweaking little bits of CSS and checking the results.