It was new technology, 3D was a fairly new concept in gaming in the mid 90s. But it took so long to get properly implemented. You have super mario 64, gex enter the gecko, lemmings 3D. I am wondering if it was a business decision and not the devs who pushed for a free roaming camera, since it was clearly not a satisfactory result gameplay wise. Because at the same era, you have games with fixed camera angles that are much better experiences overall.
I think it's largely do with 3D Technology is still new and game devs are still trying figure out how to make use of it as well as the controllers for that console at the time.
Mid way through PlayStation 1 lifecycle, they have dual-analogue control stick which I remember one the Aliens game made used of it and got bad review for it for strafting on left stick and turn camera on the right.