So, Joseph Smith had this idea that his family was descended from Joseph of Egypt. The Book of Mormon, a testament of Josephite peoples, contains a prophecy about a latter-day Joseph, son of Joseph. Most likely, this is self-referential. Joseph is dictating a prophecy about himself. If we think of the folk magical activities of Smith, Sr. and his sons as Mormonism's proto-priesthood, then the ritual instruments they used in these practices could possibly be seen as imbued with sacred significance and maybe sacred power.
Let's imagine that the first person of the Smith, Sr. family to cherish and use such objects was Joseph Smith, Sr. himself. He could have seen these objects as related to his priesthood "by right and blessing," his blood descent from Joseph entitling him to the Patriarchate. So, these relics become attached to the Church Patriarchate. Hyrum either held his own, or took over his father's ritual implements. (I am guessing he had his own, and I think there may be evidence on the parchments that point to Hyrum, If I recall correctly.) It might be the case, also, that Alvin should have been the recipient of those blessings, but he had unfortunately died. Alvin was seen as very important to the project of the Book of Mormon in its early conception.
So, think now of the sudden arrival of papyri with Egyptian mummies. Joseph announces that these papyri are records of Joseph and Abraham! Abraham preceded Joseph, and evidence points to the probability that Joseph Smith's Book of Abraham was conceived as being part of the larger record of Joseph. It was, in short, a patriarchal record that had been preserved in Egypt and passed down. If you look at images of the papyri themselves and compare them with the images of the magical parchments Eldred G. Smith displayed in the '70s, the points of similarity kind of jump out at you. This is especially true of the famous hypocephalus.
Consider the possibility that the similarity of the papyri to the magical parchments inclined Joseph to view the former as similar to the latter. Ceremonial secrets were contained in these papyri, just as magical ceremonial secrets were contained in the parchments. The magical parchments have astrological symbols on them; the hypocephalus has Smith's interpretations of Abraham's understanding of the cosmos.
Fig. 2. Stands next to Kolob, called by the Egyptians Oliblish, which is the next grand governing creation near to the celestial or the place where God resides; holding the key of power also, pertaining to other planets; as revealed from God to Abraham, as he offered sacrifice upon an altar, which he had built unto the Lord.
If the treasure digging circles were Joseph Smith's first ritualized way of making sacred space, then it stands to reason that the parchments were seen as related to the creation of sacred space, including the temple. It is not surprising, then, that the hypocephalus would be supposed by Smith to contain sacred temple information:
Fig. 8. Contains writings that cannot be revealed unto the world; but is to be had in the Holy Temple of God.
What I am saying is that Joseph Smith's view of the papyri was molded by his prior experience with folk magic. This experience was entirely tied up in the Smith family belief in being special descendants of Joseph. Naturally, the records buried with the mummies, looking so reminiscent of the symbolism of the parchments, were interpreted as being of similar import. Here is a Josephite record with astronomical, priesthood, and temple secrets. Moreover, these relics have found their rightful owners in the Smith family descendants of Joseph, who know of their Josephite tradition.
So, it is not surprising that the possession of the papyri would be a big priority for Smith, and it is not surprising that they stayed with the family. Who displayed these relics in Nauvoo? The Smith family. Who kept the papyri? Emma. Who held onto the parchments and dagger? The descendants of Hyrum, but, one also might say, those to whom the right of the Josephite Patriarchy belonged. The Josephite Patriarchy died out with Eldred G. Smith. He displayed the magical relics as Lucy Mack Smith had displayed the mummies in Nauvoo over a hundred years earlier.
This is, of course, highly speculative, but it is an interesting way of making tentative sense out of disparate but clearly connected data points.