I think it's awesome that there's a difference why we don't just have "fiends". They feel different and have a purpose. Different strokes for different folks.
In my twenty years playing the game, I'm not entirely sure that they do for most people. This distinction seems to matter more for people who invested years in the game lore, and the difference in feel may be the result of those people bringing additional cognitive information to play rather than something that's actually present in play.
For what little my observation is worth and in full sincerity: One of the common lore hurdles I have seen with people coming into the game is (1) learning the difference between fiends (e.g., devils, demons, yugoloths); (2) even remotely caring about that difference; and then (3) seeing that difference actually play out in the game in a meaningful and clear way. While I think that it's easy to blame the GM in such scenarios, I have played with a fair number of GMs and new players over my years.
As to why this might be the case: I think that the game's
heroic emphasis means that the Law vs. Chaos aspect generally gets ignored in favor of Good vs. Evil. This means that a lot of players - again IME - tend to broadly depict, see, and regard fiends under the more general catch-all umbrella of "evil" rather than fixate on differences like Chaotic Evil vs. Lawful Evil.
Edit: this is to say that I think for a lot of casual players Demons and Devils are not so much, respectively, Chaotic Evil and Lawful Evil, but, rather, they are seen as EVIL (
chaotic) and EVIL (
lawful).
I also don't think that most lay people coming into this hobby, for example, would really be able to understand why demons and devils are separate entities, especially since these terms are fairly interchangeable in the wider cultural lexicon.
Obviously your experience may (and likely does) vary, but I thought that I would offer my 2 cents.