In the distant past, pumps used braided packing to seal where the shaft comes out through the casing. But packing must leak a small amount or it will burn up. An the packing wears into the shaft or sleeve. So mechanical seals were design to be zero (or nearly zero) leakage with no shaft damage and much less horsepower drag.
Impeller flow leakage around the outside of the impeller represents a loss that degrades pump hydraulic efficiency and possibly head. Impeller seals near the impeller OD in axial leakage flow passages are usually of the plain annular or labyrinth teeth configuration. Inboard, at the impeller shaft either packing glands or mechanical shaft seals restrict leakage flows to ambient.