Coming to your questionA cryptocurrency uses a certain algorithm because it needs to serve a particular purpose. The cryptocurrency can divided into various types based on the purpose of its creation. For example Btc uses Sha-256, Eth uses Dagger-Hashimoto algorithm, Ripple uses ECDSA, Litecoin uses Scrypt, Dash uses X11, Monero uses Cryptonight and so on.
Let's consider Btc. It was created by satoshi for the purpose of using it as digital equivalent for currency. Hence in order to have higher security, shorter btc addresses and to mine currencies using POW Sha-256 was used.
Why does Eth use Dagger-Hashimoto?
A quote from github documentation of Dagger-Hashimoto will help you out.
Dagger-Hashimoto advantages :
what makes the developers of a coin decide upon a particular algorithm for the protocol to operate with?
They decide in order to make their currency more secure and to fulfill the coin's purpose of creation. 