>>43827950Steel was never bad. It was better offensively before Fairy than Poison is now.
The reason they made Fairy type was because they wanted a "light" type to encompass lighthearted themes in contrast to Dark, but they also wanted to make sure it could beat Dragon for the sake of balance (which wouldn't have made sense of it was just plain old Light type).
If Light type had been introduced alongside Dark in gen 2, there wouldn't be any design room left for a new type and they wouldn't have bothered trying to nerf Dragon, much like how they didn't introduce a 19th type to buff Ice.