From TFA, it doesn't sound like it addressed any privacy concerns but rather was designed to make it accessible for users who needed more than the English character set, and to make search within WHOIS better.

It was the early 90s. No one thought privacy was an issue. The internet only had nice people on it. Doxing wasn't really even a thing yet.

Plus, things like financial theft from individuals weren't really possible using online means only because no one had a bank account online. You still had to do that sort of thing in meatspace.