Not having dedicated floating-point hardware seems like a totally reasonable trade-off, and is common even today for applications below a certain price point. They chose the MIPS R3051, even though the relatively low-cost R3500 was available then; the R3500, with an R3000 core plus integrated R3010 FPU, MMU and memory buffer co-processors, would have blown the budget for the console. At launch in 1994, the PS1 shipped with a fixed-point GPU (with GTE for 3d matrix math), and certainly held its own against the competition.

The PS1 platform prospered because it was cheap, and relatively welcoming for developers (lots of tooling, libraries, infrastructure), and it ended up selling over 100 million units.

It's very tough to argue too much with that kind of success.

The Saturn also lacked an FPU.