In CoC 7E backgrounds are actually as part of a character as stats are. Relatives can be targeted. Bad experiences in the past can turn into full blown phobias after some failed SAN checks etc. There even are tables in the manuals if the player is not feeling creative enough.
In other games your background can help you role-playing your character. I played a young Cleric in a short lived (but very fun) Pathfinder campaign. His family was exterminated by goblins one day when he was away (nothing new here). He contemplated suicide for a while, until, one day, he bought a book from a wandering merchant. It was the "bible" of a Goddess of Good. He discovered religion, the Goddess answered his calls, and he became a Cleric. He found a new purpose in his life.
Problem was: the book was missing some pages.
Crucially, those about "sex". Did this Goddess allow for her Clerics to have sex? Was, maybe, marriage mandatory? Were her Clerics supposed to be chaste? Unknown.
And he was a young, healthy male Cleric with the hots for the party's ranger.
And she had made clear that she was really interested.
All of this led to a chain of "vignettes" worth of a sit-com. Even better, one of the other players was the second in command of the local Forge chapter (Italy was hit hard by the Forge pandemic) and he was totally stunned to discover that
you could create your own narratives just fine and no evil DM was there to stop you.
My point is that my background helped me in creating both this and other stunts (I really loved that young Cleric) but
I never become a nuisance for the DM. I never ruined a tense moment with a bad joke (unless something funny happened organically). I never was a dick because "I'm playing my background!" As a long suffering GM, I fully knew that my job as a player was to
enrich the gaming experience, not to dictate it. And, if you want to do this, having a background helps a lot.
Edit: Re "Random Backgrounds", I don't think that there is an hard and fast rule. Remember, we all play RPGs to have fun (I hope). In my case I always try to start with a character that I find interesting. As a "Joker" in a "Wild Cards" campaign I played, basically, Nosferatu (both Murnau and Herzog). My first character for BECMI when I was 16 was an adventuring and not very wise sailor who had befriended a grumpy dwarf who was the definition of "common sense"; again: not very original, but still grounds for some good role playing. One of my most beloved characters ever was a druidette of Eldath in a FR setting who had embraced "total pacifism" and was still able to cause out-of-control chaos and nervous breakdowns around her without ever exiting her "zen zone". The other players saw maybe 20% of the background I had created for her - but the whole helped me a lot in portraying convincingly such a bizarre character.
Random backgrounds are not for me. I always want to play a character I'm interested in (separation between you and your character being another sorry topic, worth of another thread...)