Too many choices make people unhappy -- and can lead to frustration and lost sales.
If you are a guest know exactly what you want -- like many of the guests on this forum -- the more specific the better, but it is much faster and more efficient to have fewer choices.
These things are usually cyclical.
You start with a couple of room categories, then get bombarded with room requests and people who want "that special, certain view" so you start creating more options until it all becomes too much to deal with.
So you simplify. Then the process starts anew.
I suppose they could have gone the other way, with every room having demand pricing sort of like cruise ships.