I think folks who weren't there might not realize how big a deal the original Unicode standard was and how quickly technology vendors raced to adopt it. Windows NT, for example, must have been developed with Unicode in mind even before the standard was official. In those circumstances the broad adoption of UCS-2 was effectively inevitable.

Even if UTF-8 had been widely known, I don't think the eventual necessity for > 16-bit code points was clear enough to have given it a chance against the relatively easy architectural shift of replacing one fixed-length character encoding with another.