They realized that untextured polygons were way faster to draw than textured ones, so rather than texture the Crash model, they cranked up the polygon count and simply colored them. Often times, the triangles were on the same order of size as the pixels. It also avoided the playstation's lack of perspective correction on textures. It both made the character look gorgeous for the day, and made the code run faster.
Yes, I played many many hours of crash as a kid and he looked extremely vivid and bright. When I code in Three.js these days I also skip loading textures and just go for hex colors on polygons :)
