It was over health not vegetarianism. McDonalds adopted a little bit of the cholesterol war and a little bit of styrofoam reduction in that time period and that's about it.
I remember it was one guy who had heart problems waged a PR war against McDonalds and made them change their cooking oil.
It definitely wasn't due to vegetarians as to try to keep the flavor they started adding beef flavoring to the fries, which AFAIK they refused to remove once vegetarians--who had thought they might be the intended audience of the vegetable oil--noticed and complained.