It's hard to credit it, but pinatas used to have a religious connotation. Instead of donkeys, pinatas were simply 7-pointed circles, each point representing a deadly sin. The confusion from spinning and the shouting represents life. The blindfold is faith. Giving the sins a sound beating gives reward.
Nowadays, children's birthday parties--and even adult celebrations--are incomplete without a pinata. It doubles as a decor and you'd even find pinatas that are too artistic to smash.