Because elsewhere was the N64.
Nowadays the reasoning people give for putting former PS3 exclusives on the 360 is "USE BETTER COMPRESSION METHODS!!!!"
During the PS1 era (not even today still) no amount of compression would make 700MB fit onto 64MB. And don't even get to multidisc games. Ever wonder why the music on N64 games was a 5 second .wav file that repeated over and over and over again, instead of full audio tracks? Every wonder why you never saw any FMV sequences on N64?
Now if you're talking about the Saturn....that just failed completely and putting games on there would have been fruitless
This is making things a little bit too simple. The PS1 was easier to develop for and sold better than the Saturn in the Western markets (Japan was tied for the first two years), but that alone can't be the whole reason why key franchises of third parties switched exclusively to Sony instead of going multiplatform on the PS1 and Saturn, especially because the PS1 didn't do that hot worldwide either until late 1996. Then there are the franchises that started out as multiplatform games, yet the immediate sequels didn't appear on the Saturn. Sony was definitely buying third party support in one way or another.
Btw, did you know that Resident Evil 2 was ported to the Nintendo 64? The two CD game fitted on a 64 MB cartridge, complete with all FMVs plus some additional features.
According to that video, in Japan, the PS3 sold over a million in 3 months....don't think the Saturn did that. The likes of Final Fantasy 7....Sony published that game.
And with regards RE2....I know about that. But I also know that despite extra little files that are able to be located within the game (EX files, if I remember correctly) and some other things, they cut the resolution in half to what the PS1 did (64 version was 320x240....) and the amount of enemies on screen is comprable to Dead Rising 360 vs Dead Rising Wii. Yeah, technically, all those third party games COULD have been multiplatform...but nothing without MAJOR drawbacks