You're talking about the period
starting in 2001. I'm talking about the period
ending in 2001. 2001 was a transition point from slow progress to the sort of performance-doubling progression you're thinking of. PCs running Windows 3.1 stuck around, doing what they do, until ~2002. People kept making games for DOS until ~2002! Then that all stopped. But someone
planning a product for release in 2001, would tend to have been planning in mind of the
previous era, not that new era. Except Apple, of course — as they tend to have their finger on the pulse of those sorts of changes (thus removing the floppy drive in the iMac, etc.)
> If you didn't have CD-ROM in 2001, you literally couldn't buy or run most software, and again, CD-ROM had been standard in most pcs since around 96/97.
While yes, this is true, most people didn't buy most software. I think you may have lived in a bit of a tech bubble. At the time, "retail-boxed PC software" was a thing only PC enthusiasts bought!
In that era, outside of a few coastal US cities with great Internet connectivity, most home PCs were used permanently disconnected from the Internet, with only the software that came loaded by the OEM (which is why, to this day, OEMs still feel an obligation to do that.) This is also why
> Microsoft Office 97 was last version to come with floppy disk release alongside the CD-ROM (46 floppies too...)
...because, if you look at PCs after 1996, they all had enough hard-drive space to ship with OEM-preinstalled copies of Microsoft Office. And they almost always did.
But most people of that era weren't buying new PCs. Most people of that era still only had the same PC they bought possibly nearly-a-decade prior, to be the fancy electric typewriter for their kids' book reports. Because nothing was demanding quite yet for them to upgrade. Because they weren't keeping up with new software. It was a "cycle of stagnation", per se.
It was only once Internet connectivity started improving in rural areas, and the web started developing multimedia killer apps with resource requirements that made old PCs feel slow, that the rest of the world started catching up, looking around, and wondering whether they indeed needed a new PC. (And even then, there was a lot of pushback, from a crowd who had up until that point got by with for years with the same first PC they ever bought; who was entirely unused to technology that changes out from under them. Especially when it was a teenager who wanted access to these killer apps — their parents often didn't get it. "Why do we need a new PC? The old one still works! This is like replacing a refrigerator that's still refrigerating!")
In short, this is why everything other than the iPod, in this era, was still using parallel. Consumer electronics people knew that for every one Silicon Valley technophile who has home broadband, there were 100 teen girls in Kansas with no Internet running Windows 98SE, who might nevertheless be swayed to buy an MP3 player — perhaps to then load it with music ripped from tapes using the PC's line-in jack with a program (distributed on an accompanying floppy!) that does some awful kind of low-bitrate but low-CPU-usage streaming compression.
It wasn't just that it took until 2003 for Apple to secure the IP rights necessary to launch the iTunes Music Store. It really just wouldn't have made sense in 2001. Too few people online to buy music to make sense of the licensing fees. But the adoption curve was clear (and clearly exponential); so Apple started work early, and got the deals done by 2003, when it would start being a profitable venture. Other companies, meanwhile — ones with large IP-rights-holders as partners — had tried the same thing years earlier! But those companies couldn't turn a profit. (At least outside of the few very special "even grandmas here are ahead of the rest of the world" markets of the time, like Japan.)
> Ask anyone who lived this period
To be clear, I'm probably older than you. I'm describing what I saw around me, at my house and my friends' houses and my school and my parents' offices and so forth, as someone who lived in a somewhat-rural area [town of ~50k people] from ~1995 until ~2007.