I think it made a lot of sense really at the time, bringing back Who to an audience, a large proportion of whom weren’t yet alive when the TV movie aired, let alone when the Doctor and Ace walked off into the sunset, by stripping the character down to the bare essentials. Eccentric alien called The Doctor who travels in a police box.
I have a lot of issues with some of the choices RTD made over the years, but sometimes I really don’t think he gets as much credit as he deserves for bringing back a show with that much history without either A/ rebooting it completely, or B/ avalanching the viewer with so much information early on that they give up before you have a chance to hook them. Removing the Timelords from the equation was part of this, and added an interesting ‘last of his kind’ vibe.
That said, given the ease with which the Daleks came back, I would like to see more Timelords in the future.