Based on this piece of old documentation I found [0] for MySQL 3.23 (the most recent version in 2002 as far as I can tell), certain types of indices were only available on certain types of engines. Furthermore, columns were restricted to 255 characters, which may be too short for some of the fields saved in the database.
Modern databases abstract away a lot of database complexity for things like indices. It's true that these days you'd just add an index on the text column and go with it. Depending on your index type and data, the end result might be that the database turns the table into third normal form by creating separate lookup tables for strings, but hides it from the user. It could also create a smarter index that's less wasteful, but the end result is not so dissimilar. Manually doing these kinds of optimisations these days is usually a waste of effort or can even cause performance issues (e.g. that post on the front page yesterday about someone forgetting to add an index because mysql added them automatically).
All that doesn't mean it was probably a terrible design back when it was written. We're talking database tech of two decades ago, when XP had just come out and was considered a memory hog because it required 128MB of RAM to work well.
[0]: http://download.nust.na/pub6/mysql/doc/refman/4.1/en/create-...