I'm not so sure about that. I think what has happened is that a lot of the really poor VHS-quality fansubs never achieved wide circulation, due to the effort involved, and eventually were lost to time or replaced by official releases. So the VHS subs that people still look at, generally, are the best of the best.
I've been watching some 90s fansubs over the past month and, to be honest, I've seen some absolutely dreadful stuff. More dreadful than anything ever out of TVN. I suspect this sub only ended up preserved because the material never saw US release, because it is otherwise completely atrocious on every level except translation (where it is merely bad).