It's because it was a different time back then. People saw 2D as some sort of old man dragging the industry down, due to the new perspectives brought on by Mario 64/Nights/Crash's success. Where as now, people will actively throw money at this type of gameplay, feeling that it's a break from the AAA market of today.
I personally think they wouldn't even care though. It was a bridge period, so overlap should've been expected.
I hated that mentality back in the day. I think that sort of limiting mentality fucks variety for us all. We could have good things, it's just asshats( with a skewed perception of how they think the world should be ruin it for the rest of us. It's one of the reasons I loath trends.
And I don't think 2D was any threat to 3D. Cue the "What can't we have both" girl, because 3D was going strong. It would've just allowed more exposure of 2D to gamers who, hell, if given a fair chance, might've actually developed some appreciation for the style rather than being conditioned to be "all 3D, all the time!". I don't doubt that whole "movement" back in the day resulted in some of the kiddies to come afterwards being so negative towards anything 2D. At least in the recent years, some of those kids opened their minds to different gaming experiences, which is why there is a new found appreciation for the 2D/retro style. Still, I can't help to think we COULD'VE had some damn fine games back in the day. I think I said this in the Harmony of Dissonance thread, but I would've killed for a REAL Symphony of the Night follow-up, on PS1 OR PS2, 2D, CD quality sound, rich and detailed backgrounds and smooth as silk gameplay! While I love all the Metroidvania games in the series afterwards, I don't think any has come close to matching SotN in pure quality. That sucks.