This topic has been batted around before, here and elsewhere, and the most persuasive explanation I've seen for the popularity of quote-mining is as you say - an appeal to authority. An odd thing about these appeals is that the typical creationist users/generators of them (Kent Hovind, The Evolution Cruncher, etc.) don't seem to care much if the Authority appealed to is terribly relevant: they'll pull up Sir Solly Zuckermann from 1948 on ape morphology or Wernher von Braun on cosmology if they find a line that appeals to them.
I think, with no proof at all, that the practice grew out of the Sunday School teaching method of memorizing selected Bible verses. Lots of fundamentalist groups seem to practice this - students learn verses to apply to particular situations, and frequently even refer to them by citation rather than even quoting them. (John 3:16 seems to be a lot more popular than Joshua 5:3, though.) Context is pretty much ignored in this little game, though the citation-quoters are quick to point out that you must read things like Joshua 5:3 in context if you start ragging them about it.