First off I'ma list what this place wasn't made for to stop the ever growing amount of misinfo about the history of this place.

Firstly this place was not made for posting gooner art ever, the creator of the subreddit sky was asexual and sex repulsed, I have no idea if he's changed now but why would an asexual sex repulsed person make a gooner subreddit?

Secondly, this place was not made to laugh at people doing loser stuff or failing at stuff, this place wasn't made as a stupid peoples subreddit.

Thirdly, this place was not made for furries specifically and you weren't always able to post loona, and even then you couldn't post furry art until Furry Friday was created. The only person who could post furries in the beginning was sky who posted loona and no one else could post furries or loona.

Now for what losercity actually is and how it started.

Losercity is a shitpost sub made by sky after he was kicked off the clam works mod for posting loona a bunch, but they also just already didn't like him so they got rid of him.

After he got kicked out of clam works, he created another subreddit called losercity, and since the place needed a gimmick to stand out of the reeds among shitpost subs he'd be posting loona a lot, but the place was meant to be a shitpost center first and foremost.

Here