funny that you post this - i mean, i guess most 5th grade classes across the country do the same thing, but my daughter has also been struggling with it. in her case, she says all the kids learned it last year and it's just being reviewed, whereas in canada (where we lived until this year) they hadn't even touched long division yet.
i learned the way most people our age (30's/40's) did - method #1.
but my daughter is having a very hard time learning to do it that way. i've never seen method #2, but i might try and see if it helps her.
my only thinking for why someone came up with that method is just like most things people come up with these days - to make everything easy so nobody actually has to remember steps and do things without messing up. LOL