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Johto is a bit weird in retrospect. At one point Brock and Misty told Ash that his Charizard was overpowered. Against the newer Johto trainers, Ash was a veteran and the new mons were overshadowed. Unlike later gens he didn't reset his party right away. Instead they gradually boxed Charizard, Snorlax, Squirtle, etc. and rotated them around with the new guys. It's a compromise, I guess.
Some kids hated Gen 3 for switching out the characters, so it's understandable why they may have been hesitant to reset Ash's team completely.
