Remember, Sun didn't do well after the dotcom boom and Sun wasn't cheap but Sun did invest a lot in desktop UNIX (Gnome HIG, documentation, internationalisation, and a major contributor with LOC). Sun GPLed this and many other things (among which Java itself and Solaris) right before they were sold out (to Oracle). We can only thank Jonathan Schwartz & Co for that because Oracle would've kept it proprietary (speculation though).
It isn't very innovative. It was one of the many window managers which did this. 3dwm, 3d desktop [1] [2] (from around 2002 IIRC), Beryl, Compiz, and Enlightenment (E17 & onward) are some other examples though not all of these were 3D accelerated.
As you said, the problem with this is its gimmicky; not productive. In gaming nice 3D effects can add something to the experience (immersion) but on a desktop it shouldn't be very noisy or abundant. So after the initial wow-effect was over these effects didn't get a long lasting stay in products.