It became increasingly obvious with time, as they started doing a lot of interesting things in later seasons that aren't really suited for non-CGI, like smooth camera angle rotations around the scene, complex special effects, etc. While in the beginning, it was mostly for the sake of making it more efficient and simpler to produce an episode.
Which they needed because of their insane production schedule.
New episodes air on Wednesday on Comedy Central. They have to have the completed episode uploaded to Comedy Central a few hours before that.
There are times when the Friday before they have no idea what the next episode will be about. Parker and Stone figure it out over the weekend, Parker writes a script, and then production can start on Monday morning. That gives them two days plus a few hours to go from freshly finished script to complete episode.
They need to, even on what is for them a leisurely week where they have the script by Thursday, be able to see that something isn't working and needs to be changed hours before air time and have their system be fast enough that they can do it.
Around the turn of the century they actually had a more powerful animation pipeline than the major animation studios like Pixar or DreamWorks or the major CGI places, all because they needed such fast turnaround.
Traditional animated sitcoms like The Simpsons or Family Guy still contend with a 9-12 month production schedule per episode.
But yeah after the early episodes / seasons it's cgi
Thanks for clarifying, good point. I should've been more clear in my original comment, because I meant to say that the pilot used real construction paper only (with no CGI), not that construction paper wasn't used at all after that.