El, why to all 3 of your great suggestions?
Why on leather? Because it provides a more crisp feel when wiping across the surface compared to microfiber.. Have you ever felt it a bit sticky immediately after cleaning a dirty steering wheel? That's a perfect example of when a microfiber towel will tend to stick to the surface whereas the tougher fabric and weave of a terry cotton towel will power through and clean/absorb/and still have enough beef to be able to fold over and handle more.
Here's a terry towel working at its best. Meguiars D181 Leather Cleaner used to cleanup the pleather center console of a Toyota Camry. A microfiber towel would've been a sticky mess...
Same thing applies to carpet & matts but in this case microfiber is even worse... Not to mention, what kind of microfibers are going to be cheap enough to sacrifice for that duty? Kirklands? Nope, they're not strong/beefy or big enough to handle that... Besides they work much better on paint.
Steam cleaning? What kind of microfiber towels would you spend good coin on just to dedicate towards steam cleaning? Once again, Kirklands aren't going to be ideal... They're thin, they'll saturate quickly, they're small, not to mention I thought microfiber couldn't handle high heat? So according to the gospel, you'd be ruining your microfiber towels if you were to use them with a steam cleaner. I don't see anyone drying on high heat, right? Lol.
Terry towel on the other hand are ideal because they're tougher, provide the right scrubbing power, they won't saturate quikly, they're the perfect size [16x24"] and you can go though as many as you need to without cringing about how many delicate microfiber towels you've just ruined.
Remember you can't use bleach to clean microfiber, but you can use bleach to help whiten those terry towels for repeated nasty jobs.
I use 100% cotton terry towels for cleaning leather [because they're softer] and cotton/polyester blend terry towels for carpets & upholstery [because they're tougher + more absorbent]
Final note: Not all surfaces are created equal, some plastic/vinyl dashboards and door panels will accept microfiber better than cotton terry, but you'll know the difference i.e. If you immediately see the terry towel linting, then odds are microfiber will work much better on that surface.
Those are my reasons.
