In the early 1960's, it was believed that there were be a HUGE explosion in air travel, and rather than focus on frequency (as is the custom now), capacity was heralded - "now everyone can fly" was really the theme.
Juan Trippe of Pan Am went to Boeing with a proposal - "if you will build us a high capacity airliner (using technology developed from Boeing Ultra-large transport proposal made to the U.S. armed forces), we will buy a large number". On April 13, 1966, Boeing and Pan Am announced the order for 25 747's.
In the late 1960's, the belief was that SST travel would take over, and the slow and lumbering subsonic jets would be relegated to cargo routes, hence the reason the 747 has an upper deck:
To facilite cargo loading through the very front.
In the 1970's, not only did the idea of mass SST travel die, but the energy crisis and the economic slump made Boeing concentrate on more efficient designs. The first "petite" wide-body, the A300, came out at this time from Airbus. Boeing planned a pair of similar designs, the 757 and 767, one wide-body, the other narrow body, but both with a common cockpit (also a fairly new concept).
Boeing marketed the 757 as a 727 replacement; but ironically enough with this topic, the 757 has become the replacement for the 707 - both are roughly the same in capacity, and both now operate trans-Atlantic routes quite nicely and profitably.
The 747 has found itself most useful on Asian routes where even with increased frequency there is still a very high demand for large capacity planes.
Pan Am:The World's Most Experienced Airline - P(oor) S(ailor's) A(irline): San Diego's Hometown Airline-Catch Our Smile!