Wasting space is a byproduct of having too much space. Just because it's bloated does not mean they didn't know it was bloated. They probably didn't care.
As time goes by, minimum hardware requirements for operating systems increase. This isn't because it is more difficult to write software, or the hardware stopped being capable of doing the same thing it used to do. It's because software design wastes more resources as those resources become increasingly available.
Today, people ship statically compiled binaries of tens to hundreds of megabytes in size because it is convenient to do so. That would have been absolutely insane before increased bandwidth and storage space made it practical. I have an internet connection so fast my wifi card can't use all the bandwidth.
What a time to be alive.