I disagree. The engine has flaws for sure, but it did well enough critically at the time and Grim is beloved today.

LucasArts stopped making adventure games because the market dried up and they wanted to move on to more profitable genres. 2D games were considered old hat at that point, and I’ve little doubt that if they hadn’t swapped to a 3D engine they wouldn’t have been allowed to make Grim Fandango at all.