Why were Haskell 98's standard classes made inferior to Haskell 1.3's?

Question

Why were these things changed for Haskell 98, and why in this way?

Haskell 98 involves a lot of simplification to the language (much of which has since been reversed). The goal was to improve Haskell as a teaching language, and to make relatively conservative choices.

See e.g.

We regarded Haskell 98 as a reasonably conservative design. For example, by that time multi-parameter type classes were being widely used, but Haskell 98 only has single-parameter type classes (Peyton Jones et al., 1997).

In: History of Haskell

And:

Haskell 98 will by no means be the last revision of Haskell. On the contrary, we design it knowing that new language extensions (multi-parameter type classes, universal and existential quantification, pattern guards, etc, etc) are well on the way. However, Haskell 98 will have a special status: the intention is that Haskell compilers will continue to support Haskell 98 (given an appropriate flag) even after later versions of the language have been defined, and so the name `Haskell 98' will refer to a fixed, stable language.

In: Haskell98 report

So, things were simplified, with the goal of producing a simpler standard.