Blaine's Quiz #3 (from Gym Challenge set) is very similar to this card - why wasn't it banned as well??
As someone who played from Base-Expedition, I got this.
The meta back then was A LOT different. BIG tournamrnts didn't have any legs yet, so weird interactions like this weren't even a possibility.
The meta was also LITERALLY 3 decks and the card pool was small enough that, if you played competitively, you knew the attacks of everything. We didn't have the "ambiguity strategy" like you can with Caturday and Nuzzle.
Between that and Blaine's Quiz #3 held NO WEIGHT against cards like Professor Oak and Bill, and then Item Finder for Professor Oak; there was no space for it--even in "InSaNiTy" builds that were prideful of being massive turbo decks (yes, that's how it was spelled).
Because the meta at the time of the big tournaments was literally: Wigglytuff / Muk, Slowking / Sneasel, and Steel Chansey. Even if you did pitch the argument then as we are doing now, I think they would go "who even plays that?" and that'd be that because there was a 100% chance that no one would play it. We are in a situation where that number is "99% sure no one will play it, but the ramifications of it being played are too much of a rulings conundrum to allow its use".
As a player who has purposely troll decks to high level events (and my daughter and I have some plans to do it in this game), you REALLY can't take that 1% and go "There's NO ONE that would be mad enough to do it."
There are people who would get their 550 for the year and go to Worlds with the sole intent of being a madlad--not maliciously do unfairly gets wins on opponents, but solely just for the memes. I mean, your chances of winning Worlds is super super low. Come to that realization and realize that you have a better chance of being remembered as the madlad that did it and made Worlds a headache.