Different people act differently, I would say that in 1995-1997 in no way did Hasbro's 12" figures look worse than Hasbro's 3 3/4" figures. Remember He-Man Luke and monkeyface Leia?
That actually warrants a Look How Far We've Come thread full of current Hasbro figures. Hasbro definitely only put so much effort into their 12" line, but they've been constantly growing with the quality of the 3 3/4" figures; comparing ones today to the earlier figures of 95, just over 10 years ago and they've made huge strides.