D1 had decent writing, especially the tomes in dungeons voiced by the narrator.
D1 knew what it was - a Robert E. Howard short story with extra gore. The moment Blizzard started expanding the mythos is when it all went to WoW, I mean shit.
Having played both the first game and the second one back to back recently I can confirm that the second game lost the atmosphere and ambience the first one had but this series
never had good writing. You're so wrong that you're specifically wrong about the game knowing what it was. Instead of a straightforward plot that would have served the minimalist format, like Robert E. Howard would put together, it's very convoluted and the game is filled with these lore dumps that are badly written. Early on in development the game's plot was to center around a revenge on a bunch of raiders that killed your family, and in the introduction a bit of that remains, someone mentioning bandits or something storming into the church that no longer serve any purpose. The setup for the next game was also there already even if the even stupider things like the high fantasy concept of a world stone wasn't in there yet.
I don't want to shit on Diablo, it's kinda unique in that it offers this high production and more casual distillation of Rogue, but there seems to be a lot of nostalgia around it clouding people's perception of the game. From
the very first plans they made for the first game the original creators had the idea to sell you lootboxes and season passes long before we even had words for it. During my playthrough I also encountered
the most cringe quest I ever encountered in a video game. The sequel had two things cut due to time and budget constraints; one chapter, which they then tacked on at the end with their expansion, and more online focused content like specific multiplayer hubs. They would have loved the always online MMO shitfest Diablo 4 turned into.
All the Diablo games have about the same writing level, except maybe 3 which was exceptionally bad, but what has changed is that they put more effort into shoving it into your face with more involved delivery systems while in the first two games, and particularly the first, you didn't need to pay much attention to it. After Deckard Cain (stupid name) gave you a ridiculous Sean Connery impression and you started to dive into the dungeon you were probably not going to interact much more with the characters unless you were desperate for more narrative in your barebones roguelike.
None of that means it is a bad game, because who cares about the writing when that's so far from what makes a dungeon crawl satisfying? And thanks to constrictions at the time they couldn't make the game shit with too much focus on the MMO experience.