They came out with the PhotoCD during this time.I used a follow-on product called Picture CD, which was an epic fail as far as I was concerned[1].
You paid an extra $7 IIRC when you had your film developed, and you got JPEGs on a CD. I gave them 35 mm print film and they gave me back 1024×1536 resolution JPEGs? That was literally worse resolution than the Canon S110 pocket camera I had then.
They got $7 out of me. Once.
The unwashed masses won't pay an extra $7 for a CD to go along with their prints, which probably cost about them about $7 for the roll (about $0.20 or $0.25 per print IIRC). They were being asked to pay double the total price.
More knowledgeable customers won't pay an extra $7 for such low resolution scans.
So who was this product for? I would have probably tried Photo CD but I think that was much more of a niche product and I didn't know about it. The mini-labs were only offering Picture CD. The services I used were usually 1 or 2 day (which meant actual processing was off-site), so they certainly could have been set up to do much higher quality scans than that.
[1] https://en.wikipedia.org/wiki/Picture_CD