Might agree with your observation of Nickel as something to show off in the past. And no question it got used both ways as cosmetic appeal and as a protective firearms finish. I would think think the cosmetic appeal was equal to the protection qualities from what I have read of the time frame. Things changed quickly for firearms between 1873 and 1911 as an example of that.
I would think that nickel was most often used in the field on a handgun in the 19th Century because of the effects of weather and the corrosive result of moisture and black powder residue. It made a huge difference with black powder then and still does even with smokeless today. Having just cleaned the two guns pictured above last night after 200 rounds loaded with Bullseye powder a nickel finish does make an obvious difference. Many small areas on a SAA exposed to powder residue and extensive corrosion if left unattended. Nickel helps in cleaning.
Even the US Army on occasion issued nickel plated guns in cases where they thought the environment of lack of maintenance would be extreme. 7th Calvary Indian Scouts got a few....and they were guns Army Officers were known to pilfer or have made up on special order. Not seen very often in Martial form because the nickel guns cost more to produce.
http://www.rockislandauction.com/viewitem/aid/56/lid/1319http://www.rockislandauction.com/viewitem/aid/56/lid/3265Or often as not refininished in nickel when sold to avoid confusion with the US owned property. No question it added some eye appeal as well when matched up to ivory or pearl.
http://www.rockislandauction.com/viewitem/aid/59/lid/3177Hand guns (or long guns for that matter) for the most part were tools originally. No doubt some liked just how flashy a nickel gun might be. But others realized just how "flashy" might be quite dangerous in the wrong place. And no question as you might have suggested early nickel guns were used to entice new sells.
Here in one in that category:
http://jamesdjulia.com/item/1049-386/Another point worth mentioning, more than one old gunman talked about how much easier it was to pick up the nickel front sight in a smoke filled room.
Rifles simply didn't take the physical abuse a handgun did and were much easier to clean the Black Power residue from.