X11 also ran fine in 1995. Granted, I think fvwm2 was probably state of the art for window managers at the time. From '95 to almost '97 or '98 I stuck pretty much in 80x25 or 80x40 text console. Not because X11 didn't work, but more so because xterm really sucked and the only apps you would use in X11 anyway were Netscape, Gimp or xv (image viewer). Gtk+ also did not exist, so everything was ugly Motif or Tcl/Tk.
Oh, and... there was always talk of replacing X11. Even in the '90s. People have been talking about replacing X11 nearly as long as X11 has been around, sadly.
Hardware has just improved enough that we don't need to care.
This isn't wayland vs X11.
X11 is terrible for other reasons, but let's not give wayland credit for hardware improvement.
X was actually okay in 1996 on the proprietary Unixes with their proprietary graphics card and proprietary monitors. (At least on HPUX, Solaris, and Irix). Linux and the *BSDs had some catching up to do primarily in hardware support and autoconfiguration. But they did so quite rapidly.