It can be an investment as well if you're playing the rental market. It's just a riskier investment because of the maintenance and if the market drops then you're stuck paying the mortgage (unless you were able to buy it outright).
There is no inherent reason why a house should appreciate in price
There are good reasons for a home to appreciate. If you have nicer landscaping and trees that have been growing and well maintained for decades, your land certainly should appreciate. If you use quality building materials like granite or fine woods, those should definitely appreciate. If you remodel then appreciate.
The physical structure should almost never appreciate. Land is a separate issue. Clearly valuable and scare land should gain value as economic growth and development in the area increases. Houses with unique and historic architecture might themselves gain value, but those are the exception that prove the rule. The majority of houses age like this and are not more desirable with age.
The "house as investment" philosophy really took off IMO because most people don't save or have really any other assets and home ownership rates were high. What better way to grow wealth of everyone in the country than create a ponzi scheme with policies to guarantee ever increasing prices? The policy was a political winner, but it literally mortgages the future of the country. If housing prices increases faster than other assets and income (which makes it a great investment) then they eventually become unaffordable, and the only way to keep them rising is to detach the cost of buying from the true lifetime cost with cheap mortgages (i.e. long terms and low interest rates). That strategy is almost out of ammunition right now though. I wonder if we'll start to see 100-year mortgages like you see in some other countries? But the effect of that is very marginal since so much of a 30-year mortgage is interest anyway. Either society gives up on the idea that home ownership is achievable by most people or we give up on the idea that houses always need to dramatically increase in value.
A house is not an investment. It is a liability. This is why banks require insurance when you take out a loan against it. It takes a lot of money to maintain a house. It takes a lot of time.