I was also puzzled when I saw the new Tomb Raider 123 remaster where you can switch between the new graphics and the "original" graphics. The original graphics in the remaster have no filtering so it looks worse than the actual original game where you couldn't disable filtering. It also has a very big UI and text like the playstation 1 version (actually like the modern smartphone version) while the pc version had a small UI.
Many people had a Playstation 1 instead of a pc, so when they play old games they want the nostalgia and the lack of filtering is part of it. In the FF7 Steam version you can enable or disable the texture filtering and I noticed some people play without filtering while it wasn't possible back then. You could disable filtering with hidden graphics card settings but I don't think FF7 would work on a graphics card that didn't have texture filtering (except maybe the Matrox G100 but I'm not sure).
I remember the first time I saw the voodoo 1 at a friend's I stood close to a wall in Turkok to see the filtering. The texture had maybe 4 pixels stretched on the whole screen but it looked so nice at the time. A bit later when S3 made their texture compression, I thought texture filtering was only temporary and in the future the texture resolution would be so high you wouldn't need filtering anymore. I still liked filtering though. I don't remember at which resolution I played at the time but I always had it pretty low. I never used antialiasing unless it's forced.
Maybe Unreal engine or other engines started the trend of pixels and dithering too. When objects appear or disappear there's this dithering that the Matrox Mystique did instead of transparency. I don't like it but I understand it's an optimization. Maybe people like it now.
I think in general there's a lot of confusion about how games looked. Some games got an hd remaster while it was already possible to play the game in a high resolution back then on pc. Sometimes people say CRT were blurry but I think they remember the LCD upscaling, because a CRT is sharp. In windows in 1600*1200 on a CRT, pixels aren't as sharp as a modern screen, but when playing video games pixels are sharp. Someone told me that CRT are leaving a trail behind the mouse cursor but it's wrong, it's something that a LCD does. Someone showed a CRT shader with a fake screen around the game with lots of reflections on the plastic, which also don't happen on a CRT. I think many people played on a console and when they say CRT, they actually mean a CRT TV. I also saw a youtube video that showed old Monkey Island clips also posted on youtube, and the youtuber complained that it was in 240p and not in 1080p, but with a nearest neighbor filter and if Youtube's compression was higher, 240p would be enough for a game in 320*240 or 200.