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.