This is an interesting statement, because my group, which has played fantasy games using AD&D2, 3E, 3.5, 4E, PF2, PF2, 13A, Fate, and Savage Worlds fairly recently played an old-school style game where we used weapon-based initiative modifiers from AD&D1 and no skills. We use the following AD&D options:
- Group rolls a d10; GM rolls d10 for opposition
- Each player adds their weapon speed modifier (or spell time modifier) to the roll
- Go in order from first to last
We actually liked this quite a lot. It added incentive to use fast weapons like daggers over 2-H weapons; it meant that the order the party went in was usually pretty fixed, so players could be quite tactical -- also sped up decision-making. Ditto for the GM who could line up monsters in order before even rolling.
At the other end of the age scale is Fate, where in one game we do use skill-based rolling. In my game though, I use the GUMSHOE approach where your rank with whatever skill you are using determines initiate (so the +4 provoke attack beats the +3 ranged attack every time). That also works nicely for us.
So it is possible that the (optional) weapon-based initiative from AD&D was removed because it was "godawful" and the reason it took so long is that the designers were a bunch of idiots compared to the average GM (which is your stated position). It is also possible that as an optional rule, some people liked it and it was only removed when the game started being more complicated and people started wanting more complex rules-heavy systems which combined initiate rolling with feats and so on and that combining both these new rules and the old optional rules was simply too much even for rules-heavy systems. The fact that optional initiative systems are so popular (popcorn initiative, e.g.) and that modern systems like GUMSHOE are embracing simpler systems seems to me a pretty good indication that for rules-light and rules-medium games, per-character initiate rolls are not, as you believe "needed", but are instead increasingly seen as unnecessary.