The history is more complicated than that. The artists back then probably wanted their games to look hand-drawn, but were forced to create pixelated designs in acknowledgment of technological limitations. By the time technology caught up around the turn of the millennium, 2D games were being wholesale replaced with 3D games (often to the detriment of the games). At that point 2D games were almost entirely relegated to portable consoles (with some notable exceptions, e.g. Odin Sphere on the PS2), whose hardware was a generation behind, further perpetuating the pixel art aesthetic. Then, once developers finally acknowledged that not all games were better in 3D, pixel art had itself become a vogue retro aesthetic. The fact that we're finally seeing a ton of 2D games that don't use the pixel aesthetic is a sign of maturity in the industry (although a well-done pixel aesthetic can still look great).
It's more complicated than that too imo. Before Broken Sword 3 was released, Charles Cecil said they had always wanted the game to be 3D (https://adventuregamers.com/articles/view/17561). So it's likely that hand drawn 2D (pixelated or not) was often used because of limitations also. It's further possible that developers chose point and click as the medium because of technical limitations (e.g. it's easier to draw/render static scenes than develop a 3d engine). Evidence of this is - further to the death of 2D at this time as you point out - the fact that point and click died also as a genre at this time, as 3d modelling tools and third party 3d engines were becoming more accessible.
I think this same dynamic applies to many old styles in gamedev that are now seen as having an aesthetic quality when really they arose out of necessity (e.g. 8-bit era pixelation, ZX spectrum colour palates, dithered transparency)
So arguably if developers are choosing hand drawn now or P&C, it's perhaps the first time that it's the "harder" option, rather than being a return to "normal"
A lot of game designers focus on the story and experience they want to bring, not on the technology the programmers have to use to bring it to life.
There are a lot of 'tricks' you can use in a 2d game to let it show more depth (like parallax scrolling, use of angles, lighting etc), so I'm not sure if '3d' means the same thing to a game designer and a programmer.
3d made more dramatic camera work and lighting possible at the expense of increased production cost. The point and click genre always was some sort of niche popular with the tech crowd in the 90's but couldn't scale up when the computer and video game industry broke into the mainstream. I think that is mainly a demographic difference: point and click games are still being made and sold, but compared to the rest of the videogame market they are a niche.
Possibly so! A shame too, it's my favourite genre and to this day I think 30 year old games are superior to contemporary ones, incl ones that were considered mediocre at the time (Harvester, Phantasmagoria, etc)
Lots of the old point&click games certainly have their charm, but it's not really difficult to see they are lacking in mainstream appeal. Most people don't see solving obscure (sometime maddening) object puzzles as entertainment ;)
Many of the old games have unfair puzzles and are almost unsolvable without a guide.
BS3 contained way too many stupid crate puzzles. The 4th a nonsensical story. I found the 5th to be enjoyable, but sometimes a bit 'fan service' oriented.
Oh I also hated it at the time, but regardless it was apparently the "vision". I don't think any BS since have captured the charm of 1 and 2, and I think the animation and art are big factors there.
I think the source of the maturation adds another interesting twist to the story.
A lot of 2D games today are built with 3D engines, and use modern GPU-assisted tech like shaders for lighting and effects. The path to better 2D needed to pass through a 3D phase just for the tooling.
Tooling is where I think the games industry stores most of its culture. The studios burn through a generation of devs within a decade, so it's risky to leave it in their heads.
Note that most old pixel art games didn’t look pixelated when you played them, because they’re actually dithered. They were made to be run through a composite cable to a CRT and use the dot crawl/rainbow/scanline effects to generate a smoother picture.
Which doesn’t mean you should keep a CRT around, those things are way too heavy.
