The music industry in the 90s was so dead-set on albums because albums were their cash cow. You see, when CDs came out, the industry realized it was the perfect gimmick to sell you your whole music collection all over again, now in crystal-clear digital audio. So much so that new industry labeling standards had to be made just to distinguish between re-releases and new all-digital recordings[0].

Problem is, you can only sell people better versions of the same White Album before they have perfect copies of the master tapes, after which anything higher quality is just snake oil. They didn't want the boom to end, so they pushed hard for all their artists to release albums, even if singles made more sense for them. The music industry didn't have a glut of good songs that needed to get packed onto albums for efficiency. They were larding up discs with cheaply-produced filler songs to justify charging album prices for a single.

Also, fun fact: the original plan for CD singles was to package them on smaller discs; Sony even made a portable CD player sized specifically for them. That would have further reduced the distribution and production costs of singles, as they'd take up less shelf space and use less polycarbonate.

[0] https://en.wikipedia.org/wiki/SPARS_code