Sure didn't. It's a terrible way to treat voice calls, and as far as the phone company was concerned, voice was the only thing.
Data could ride a voice-grade connection just fine, but voice suffered badly when "statistically multiplexed", a term used (oft derisively) to refer to packetization.
This is still true, by the way. Radio studios still use ISDN links to other studios, because they have fixed latency and incredibly low jitter.
Customers have gotten used to the latency of digital mobile phones, but some of us still remember the truly simultaneous conversation of a landline or analog cellphone. (I remember the rollout of digital, and the... and the con.... go ahead.... no, you go ahead... okay, the confusion as people were just learning to converse with a delay on the line.) It just turned out that cheaper capacity was more important.
ATM was always a dead-end, though. I think a lot of people knew that even as it was being deployed. If you're packetizing anyway, you might as well throw QoS right out the window and embrace nondeterminism wholeheartedly. It's cheaper, and that writing was already on the wall. Quality had been the mantra for the first hundred years of the Bell system, but deregulation and competition allowed the almighty dollar to prevail over every other concern. Enjoy the jitter!