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.
Fixed Cameras (that is, cameras with a pre-determined location according to the player location, meaning the camera can move like in Silent Hill, not just a Static Camera like in Resident Evil) are basically a requirement for Survival Horror. This is why I say nearly all modern “survival horror” games are actually just Action Shooter games. Modern Resident Evil, Silent Hill, Alone on the Dark, etc. All Action Shooters now.
One of Survival Horror’s biggest elements is that the peak optimal way to play is intentionally avoiding combat (except mandatory bosses). Most true Survival Horror games have combat that feels bad. It either has low visibility, or the player animations are slow, etc. Tools that the developers use to try to discourage the player from engaging in combat while at the same time thematically fitting in to the genre. Compare this with modern action horror games: the combat feels good. The aim is easy, the animations are fast. The player will want to engage in combat more because that is part of the design for mainstream audiences.
Fixed cameras also build anticipation in the player and create a more memorable playthrough experience. Everyone that played Silent Hill 1 remembers this scene forever:
Both Dino Crisis 1 and Silent Hill on the PS1 used this style of camera to great effect.