Mistake isn't the right word. It's just a tradeoff.
There was no perfect solution available, so a tradeoff was necessary. You can disagree with this particular tradeoff, but had they gone another way some people would disagree with that as well. To be a mistake there would have had to have been an option available that was clearly better at the time.
Anyway, the idea that TS 5 should be backwards compatible with TS 1 is probably a bad one. Personally, I think packages with wide usage break backwards compatibility far too easily -- it puts everyone who uses it on an upgrade treadmill, so it should be done very judiciously. But even I wouldn't argue that TS 1 should have been its final form.
There was no perfect solution available, so a tradeoff was necessary. You can disagree with this particular tradeoff, but had they gone another way some people would disagree with that as well. To be a mistake there would have had to have been an option available that was clearly better at the time.
Anyway, the idea that TS 5 should be backwards compatible with TS 1 is probably a bad one. Personally, I think packages with wide usage break backwards compatibility far too easily -- it puts everyone who uses it on an upgrade treadmill, so it should be done very judiciously. But even I wouldn't argue that TS 1 should have been its final form.