That's why it depends
Things like AES and SHA are implemented in hardware these days.
We can get into discussion on whether netware or xenix on a 386 is an unusable dog or not, I've got an actual 386 about 6 feet away from me as I write this. I could even give you login if you want to live the pain.
Windows 95 made compromises, read barbarians led by Bill Gates for a good rundown. It was never intended to be their network line (NT), but instead for traditional home computers. Internet explorer was super last minute that's why it was just licensed code from spyglass mosaic. It was released the day after OEMs got windows 95.
Gates didn't think there'd be a large demand for dialup modem based internet and that they had a few years to worry about it. He pivoted effectively a month or two before release. That's why MS pushed multiple patches out quickly after the release to get a competent networking stack outside of winsock.
The people making windows 95 were competent and cared, they just had lots of conflicting priorities to attend to at once and people used it not as the manufacturers had intended. It's wasn't an easy job.
Sure it has security vulnerabilities by 2021 standards. I'd venture to say every system in 1995 that could reasonably run on a typical 4 year old home computer did at the time. 386BSD 1.0, NetBSD 1.1, Linux 1.3, likely all riddled with issues by modern standards.
And yes I'm obviously totally aware of the mainstream pop culture consensus of windows 95 sux or whatever. I mean duh, do you really think that's news to me?
I know it could BSOD with some malformed packets and that its user security was totally fake. It was totally used in ways it wasn't designed for.
Microsoft honestly thought serious stuff would be run on netware, MVS, sunos, os/2, hpux, nonstop os, tru64, os 2200, qnx, etc, certainly not windows 95. "Ah shit, here we go anyway"
The curse of success
Isn't this the hallmark of all truly revolutionary technologies?
There's security related processor features that the CPUs at the time didn't have and the kind of complete sandboxing abstractions we take for granted came at a high cost (VT instruction sets were a decade off and minimum ram was 4MB, not GB, but MB ... for everything, the whole system, all of it).
As far as encryption goes, it was slow. Transparent disk encryption was totally possible but the performance hit was significant. People could be forgiven for deciding they really didn't care that much. Home users weren't keeping the kinds of secrets on their home computer that people do on their cell phones these days. The world was less digitally integrated.