Back then a CD had about as much storage as your entire hard drive. Also, lego island isn't really a AAA game. A AAA game from 1997 would be something like final fantasy 7, which came on two whole CDs. Drive capacity hit a boom around the 2000s and 2010s, and only recently have AAA games been catching up.

People always want to blame this shit on game developers being lazy, and they're not wrong that a lot of AAA games are bug ridden messes designed to please shareholders. But games are getting more and more complex, and these developers are being forced to work under strict time constraints.

That doesn't mean there isn't room to improve. Maybe offering different download options depending on your storage needs should become a common practice (iirc some games used to do that back when internet bandwidth was limited).