It seems that suit served another purpose besides putting Phelps' bulge on international TV.
The end result of a partnership between Speedo and NASA (because who needs a Mars base when you can create a race of Aquamen?), the LZR Racer was a full-body, polyurethane-based swimsuit designed to squish the human body into a perfect tube, reduce drag, and trap air to increase buoyancy. Detractors were quick to label the LZR as "technological doping," and despite Speedo's insistence that it was "not a miracle suit," it's difficult to argue with the results.
Those sponsored by swimwear companies other than Speedo actively revolted, insisting that wearing an LZR Racer was integral to their ability to remain competitive. Shares in companies such as Asics and TYR dropped when it became clear that they couldn't keep up, with TYR even filing an antitrust lawsuit in an attempt to put the brakes on Speedo's onrushing freight train full of gold medals.
Following the games, FINA (the international governing body of swimming) passed a ruling outlawing space-age materials and limiting the amount of a swimmer's body that can be covered by a swimsuit. Plus, this way everybody gets to see more of Michael Phelps' torso. Because that's what he needs. More torso.