The trend, BTW, isn't just isolated to the ghetto-chic-iness of Hip Hop culture. It's actually fairly prevalent in the Skater culture of California and Arizona. I get this even less, because unless their mom took the time to hem their pants, the pants are bound to get caught in a wheel.
I wouldn't be surprised if the trend, which apparently originated in "gangland," started for more utilitarian reasons. You're a dealer, you need to hide your product on your person. Sagging, loose pants are less likely to give the location of where you stashed your product on your personage. There are less likely to be bulges pointing out the fact the your Glock is nestled in your butt crack. The lower you wear your pants, the more storage space you have. This makes it that the pants become so ill fitting that you NEED to wear the belt. So now you have to make sure that your boxers are visible because I believe it's a faux-pas to show ass crack in "Gangland."
Of course fashion spreads like a virus with its head cut off and you have this look that has spread to other groups. Kind of like how it's cute to have a jeweled brass knuckles necklace charm now.