It's the difference between someone working in a world of engineering tradeoffs and a fantasist imagining their next übergame with everything awesome in it.
I looked into the development cycle behind Daikatana, partly because it had its 25th anniversary this year and so for some reason, YouTube was recommending me Daikatana content. And... there's a reason why Romero's first dev team all quit. Daikatana started life as a 400-page document full of everything Romero found awesome at the time. There were going to be time travel mechanics and a roleplaying party system like Chrono Trigger. It was going to have like a hundred awesome weapons that totally reinvented how to make things go boom. It was going to have the sweetest graphics imaginable. Etc. It was like something Imari Stevenson would have written as a teenager, which is somewhat surprising since Romero could now call himself a seasoned industry professional.
What's worse, "Design is Law" basically meant "what I say goes". It was his job to have the ideas, and it was his team's job to implement them. Romero wanted to be the "idea guy", and Daikatana was an "idea guy" game. I doubt he had the maturity at the time to understand what design is, in terms of solving a problem with the tools and constraints you have. He wanted Daikatana, and Quake before that, to have everything, and didn't know how to pare it down to the essentials, make compromises, and most importantly, listen to his team. Maybe there's an alternate-universe Quake or Daikatana somewhere that's just a bit more ambitious than the Quake we got, incorporating more roleplaying elements into a focused experience. But in our timeline, Romero didn't want to make that game.
Of course, after taking the L on Daikatana's eventual release, Romero wised up and started delivering much more focused and polished experiences, learning to work within constraints and going a long way toward rehabilitating his reputation. But that's not where he was when he criticized Quake for not pushing the envelope enough.
Yeah, Romero seemed too ambitious. I didn't play the original Daikatana, but the Game Boy Color port was surprisingly good. The basic 2D graphics of the system helped enforce technical simplicity. So an undisciplined game designer could actually go nuts (within the technical limitations of a tile-based 8-bit machine) without much risk of overwhelming programmers or artists.
However, the GBC game wasn't actually developed by Romero's team, but outsourced to the Japanese studio Kemco. Romero was involved, though I'm not sure how much.
Anyway, what made the GBC game unique is that it played like a linear story-driven first-person game, similar to Half-Life, just not in first-person.
The presentation was top-down, like Zelda Link's Awakening, but the world wasn't split into an overworld and dungeons, nor was it split into "levels". Instead you would just walk from location to location, where side paths would be blocked off, similar to Half-Life. On the way you were solving environmental (story related) puzzles, killing enemies, meeting allies, all while advancing the elaborate plot through occasional dialog scenes. It felt pretty modern, like playing an action thriller.
For some reason I never saw another 2D game which played like that. I assume one reason is that this type of story-driven action game was only invented with Half-Life (1998), at which point 2D games were already out of fashion on PC and home consoles. Though this doesn't explain why it didn't catch on for mobile consoles.
So in conclusion, I think Romero (his own studio) might have been better off developing ambitious 2D action adventures for constrained mobile consoles rather than trying the same on more challenging 3D hardware. It would have been a nice niche that no other team occupied at the time, to my knowledge.
Well, that's kinda what he did. He formed a new studio, Monkeystone Games, and released the 2D top-down adventure, Hyperspace Delivery Boy, on Windows CE devices, which was pretty well received at the time. Like I said, he took the L pretty well and learned its lessons.
I've played Daikatana GBC. It's pretty good. Years back, Romero released the ROM on his web site as a free download. I suspect ION was pretty involved, at least from a standpoint of making sure the story unfolded more or less as it did in the main game.