The system could only display 400-something colors at a time. Once you reduce the number of colors that can be used, you lose gradients so one color doesn't ease into another color. Due to this, art styles were typically different and used contrast to "pop" the characters and items visuals in game since being more realistic wasn't an easy (or possible) option.

Now that we can have millions of colors, you can do whatever style you want.

A similar thing happened as polygon counts went up.