They looked better than in HD, but no one in their right mind thought that was peak performance. It was just better than anything we'd seen so far.

Actually, the early 3D didn't look 'great' even on CRT. Particularly PS1 had affine texture mapping and a very "wobbly" low precision geometry operations, in addition to the obvious limitations of polygon count and texture resolution. It was "neat" and "novel" to see that be attempted, but it felt in some ways kind of like a step back from where 2D games had gotten by that point. Both visually and control wise (very awkward control/camera schemes were attempted back then).

Much of the "but it looks great on CRT" applies to pretty deliberately crafted pixel art given knowledge of how NTSC or PAL feeding into a CRT behaved. The artistic design knew precisely how it was going to be presented and used that for interesting tricks in how things got blurred (e.g. faux translucency by putting stripy sprites on top of each other and letting the blur fake the translucency). In the 3D land, the textures and models were going to be distorted before presentation so they couldn't do a lot of "leaning into the CRT" in their design. Consolation being that the hardware could now actually pull off the efects they were formerly relying on the CRT blur to pull off.