The M25 was only one of the four original London orbital motorways to be built - the other would have been through the metropolitan area (one in fact would have gone along the railway line 300 yards away from here, which would have improved the area no end (NOT). Unsurprisingly those were abandoned in the mid-1970s after public outcry - not many people in London would have lived far away from an eight-lane concrete elevated highway.
The result is that the M25 has all the traffic from these (a lot of people drive out to the M25 and go round rather than bludgen through traffic in town), plus it's both a local bypass for bits of London and towns like Leatherhead and Staines, and it has to be a through route for traffic from the North to the channel (and airports). Not surprising it gets a bit snarled up from time to time.
[Off topic a bit]
The history of the abortive motorways is fascinating - there's evidence of bits of land being left for them until quite recently, and redevelopment being done around where they would go. Further reading follows:
http://www.urban75.org/brixton/features/barrier.html
http://www.cbrd.co.uk/histories/ringway2/
http://www.btinternet.com/~roads/lon_mway/index.html
There's a rather unpleasant development in Eltham where there's a suspiciously wide gap, too - see if you can spot it:
Aerial view