Like I said, early on there are a lot of ideas floating around that turn out to just not be realistic. The fact that they talked about it is just an indication of bad PR and messaging. There was always going to be compromise, there was always going to be ideas and goals that didn't pan out as much as they may have hoped. I also seem to remember that one of the big proponents was a consultant who's name I sadly forget that was only on the project for a few months at initiation. Of course, as you said, there's a lot of info no longer available.
In any case, I do think we have a modular system, it's just that much of the modularity has been left up to 3PP. To tie it back to the thread topic, is why I don't think they would get rid of the OGL even if they could. WOTC gets a decent amount of support for the core game by letting other companies take the risks and chase after the niche markets.