I agree that the washed-out textures haven’t aged well.
But at the time, not having pixelated textures was the first thing people looked at when judging graphics quality. I remember that being a HUGE selling point of the N64 and something that made the console look almost a generation ahead of the PlayStation and Sega Saturn to kids back then.
Today, I think I prefer the PSX look, thoug. Maybe with Z-buffer correction to avoid the warped textures of the PlayStation.