It’s my understanding that for the original TPM puppet (Creepy Puppet Yoda) they were trying to go for a younger look. When that didn’t play well for audiences they instead tried to return to the look of the ESB puppet in digital form. They tried their best (in 2002 CGI terms) but it still wasn’t nearly right.
So as far as I have been able to tell, the CGI was really their best attempt at replicating the ESB puppet.
That’s a fair point, CGI was still being pushed to its limits at the time so you are probably right. I would have thought Lucas would have wanted to go back and update it, but perhaps he grew to prefer the updated design? This is all conjecture of course