Anyone Know, why We use external javascript?

What are pros of using an external javascript file? I just can't figure it out, I see big websites using them all around several times instead of server-side includes. Is it just for caching?
If it's a matter of clean code and seperation of concerns, then you can still include it from the serverside into the html. For example I use SMARTY and I can just include the file {include file='javascript.js} inside <script></script> tages. If it's for performance I can't see anything other than an extra http request that makes the external file slower involved. I'm sure I must be missing something because all the big websites still do this.
Is it because of caching the file? my javascripts are dynamic and shouldn't be cached anyway.
could someone help me out to make the right decision to choose what to do with my javascript files.
ps:can a 1.5K user create a tag for external-javascript?

Answer Is:

In Your case, The most important is that the file is cached by the browser. The fewer bytes that need to be sent from the server the better. This is a big part of web performance.

Second to that, it provides modularity.
I'm not sure why your JavaScript is dynamic, but I suggest you rewrite it in a way that removes that need. That in itself might be an issue for you down the road.