Bluing was meant to counter slight yellow tinge bleached cotton fabrics and paper have as a natural occurrence. In northern hemisphere blue-white is perceived as "whiter", while in southern it is red-white.
That being said have housekeeping and laundering books in my library and have read online going back to late 1800's through 1950's and all say pretty much same thing...
Laundry that is properly washed does not require frequent or routine use of bluing. If you had to use bluing after ever wash then something was very, very wrong with how your laundering skills.
Bluing can counter a slight yellow tinge, but if we're talking about seriously yellowed areas it won't make a difference. People nearly dyed white things blue using vast amounts of bluing in aid of countering or hiding yellow areas. You could still see the yellow area only it was slightly coated blue, but more to point now white areas were dyed a dark blue as well.
When done properly you shouldn't notice bluing was used at all, and on no account were things supposed to have more than a slight bluish tinge that was hardly noticeable.
Housewives, laundresses, commercial laundries, etc... all had to deal with yellow marking caused by oxidation of body soils. This has been happening ever since humans began wearing textiles made from cotton, linen, silk, etc....
As have stated, way in past to get laundry clean and white was plenty of hot (or boiling water), some sort of alkali (soda ash, sodium metasilicate, borax, lye, etc....), and plenty of mechanical action. Bleaching as in oxygen, chlorine or ultraviolet (sunlight) helped as well.
Tattle-tale grey (dingy laundry) is something else entirely different from yellow staining.
Oh and other problem with bluing is while it does make white things seem "whiter", it also can make them appear dull. This is why OBAs (florescent optical brightening agents), largely replaced bluing and or sometimes both used together.
Famous "La France" bluing powder had both type of bluing (hence the color of product) and OBAs. Indeed many laundry powders of old were blue for that reason as well. The bit of bluing helped counter yellow tinge, but the OBAs made whites and colors pop by reflecting certain spectrum of ultraviolet light.
Anyone who believes am just rabbiting on again, go out and get some bluing, then take badly or even just moderately yellowed item and give it a bluing rinse. When things dry you'll notice the yellow areas are still there underneath the blue.