It was devised by Edwin Catmull and Jim Clark in 1978 as a generalization of bi-cubic uniform B-spline surfaces to arbitrary topology.
[1] In 2005/06, Edwin Catmull, together with Tony DeRose and Jos Stam, received an Academy Award for Technical Achievement for their invention and application of subdivision surfaces.
Stam described a technique for a direct evaluation of the limit surface without recursion.
The arbitrary-looking barycenter formula was chosen by Catmull and Clark based on the aesthetic appearance of the resulting surfaces rather than on a mathematical derivation, although they do go to great lengths to rigorously show that the method converges to bicubic B-spline surfaces.
After one iteration, the number of extraordinary points on the surface remains constant.