Why placeholder text is Latin
Because you cannot read it. The point of placeholder text is to show the shape of a paragraph without anybody stopping to judge the words, and English placeholder invites exactly that — a reviewer reads it, reacts to it, and the conversation moves from the layout to the copy.
The passage itself comes from Cicero, mangled by centuries of typesetters, which is why it is nearly-Latin rather than Latin. It has been used for this since the sixteenth century for the same reason it works now: the letter frequencies and word lengths resemble European prose closely enough that a block of it sets like real text.