Cinnabar Island, in the era of Red the Legendary Trainer, was a very prosperous island and a very popular tourist spot. There were three reasons why people would visit the island so often and in such mass. The first of these was Cinnabar Gym, where trainers would go to challenge Blaine, the Fire Type gym leader, in an attempt to obtain the Volcano Badge. The second was Cinnabar Research Labs, were individuals who had fossilized Pokemon could go to restore the fossils to their Pokenoid forms. The third reason was the defunct Cinnabar Mansion, the former location of several scientists who engaged in the Mewtwo Project, and is rumored to the creating grounds of the MissingNo Legend (These rumors, however, are unconfirmed). These reasons helped Cinnabar Island prosper beyond its confides as an island. That all changed when the fire nation attacked when Cinnabar Volcano exploded
Cinnabar Island, two years after the Era of Red, saw a drastic and violent event happen: the eruption of Cinnabar Volcano, once thought to be dormant, that rested under Cinnabar Gym. Blaine managed to evacuate the island so that nobody got left behind, but the island was wrecked regardless. They set up a temporary Pokemon Center for refugees, and Blaine moved gym operations to a cavern within Seafoam Islands.
Three years later, Blaine decided to rebuild Cinnabar Island, just a bit further south of the original island. Within time, it became a popular tourist spot once again, with the Volcanic Caverns being the biggest tourist attraction of all. A Seismology and Geothermal Center was built on Volcano Island, in order to keep track of the volcano's activity. Some people discovered the portions of Cinnabar Mansion remained intact under the volcano's destruction, just very disheveled.
In the present day, Cinnabar Island has regained its role as a popular spot for tourism - vendors have set up street booths selling exotic and rare items, items from all over.
However, Cinnabar Volcano seems to be important to Team Rocket… Why that is though is anyone's guess.