I believe the motivation was that most Outlook users were at corporations who sent/received most of their emails from coworkers who also used Outlook.

What these users really wanted was the ability to edit and format their emails the same way they did in Word. Word really is a fantastic document editor/formatter, and I don't know of any html doc editor that comes close to the flexibility, ease, and power of Word.

So they traded standards for what people really wanted - email that they could format.