It was annoying. The problem they had was the upper left already had a control there. The system menu. In some programs it is still 'there' but hidden. You can see it if you left click on the upper left corner. They could not get rid of it as some old win3x programs went trolling around in that menu and changed it.
Double-clicking the upper-left corner closed the window, a carryover from earlier versions. I think it still does this, to support programs that auto-click (such as quick and dirty corporate IT apps and such). They couldn't put a single-click control in the same spot.
Also, every app, whether it is hidden or not still responds to Alt+Space which does what the single-click used to do and bring up that old window controls menu, and it still drops down from that same Win 3.x corner. It's a fascinating commitment to a strange backwards compatibility.
(Up until Aero Snap in Vista and it's keyboard shortcuts of Win+Arrow Key I used to use Alt+Space,M a bunch because it was always the easiest way to move any window by keyboard in the event it got stuck somewhere out of mouse range or you just didn't feel like switching to mouse.)
It's also a handy way to get a window that got moved off screen easily, which can happen in setups with multiple monitors that get connected and disconnected.
Also, most applications will actually honor Ctrl+C/V as well as the Ctrl+Insert/Shift+Insert shortcuts, from the 1987 IBM CUA guidelines[0].
Remember one of the goals was 'just works' too. As they wanted to move people off win3x. The win3x apps had to work/look the same but pick up some of the nice styling from win9x. Some programs would also roll their own system menu and put it in that spot. That would cause a cover up of the close. For a run of the mill application it was just a style and they could have put it anywhere. For programs that controlled the whole window including the title bar area it was a tough choice. Even then it did not always come out looking right. The win95 style guide basically told everyone to knock it off and let windows control it.
Was it all a good choice? For some it was annoying. There was a shortcut that did the same thing. If you double clicked the upper left it would close the window too. Which is how they taught people to use win3x. Most certainly it was an interesting compromise to the constraints they had.
Copying the style was all on everyone else though. They wanted it to be familiar to windows users. All to 'gain market-share' I guess.
