I have always been led to believe that the theory behind rope tobacco was as such:
Long ago, when men worked deep in the mines, they were rationed a little piece of rope tobacco each morning before heading into the mines. Now the mines were full of toxic fumes and gases, so obviously, they could not light up their pipes down there. What they would do is bite off a piece of the rope tobacco and chew it while they worked in the mines. When they went out for their lunch break, they would take the tobacco out of their mouths and set it aside, eat lunch, and then continue working. When they went home at night, their previously chewed tobacco had enough time to dry out, and they would then fill their pipe with the tobacco and smoke it.
I can't find a reputable hard reference to this, it is just what I have been told through the grapevine. Makes for a cool story though.