It was designed by people who were trying to digitally emulate 1920s copper-wire circuits at a time when the entire world was moving to packet-switched digital data. I remember visiting a large telco at the time and having to tell them about this new thing called ADSL that was going to steamroller them if they weren't careful. "Nooo... no, that's not real, you can't do that over a phone line, not possible. And even if it was it'll never take off, if anyone really wants a digital link they can go with our X.25 or ISDN offerings".
When I pointed out in a previous post how much X.400 sucked, even that never got anywhere near X.25. X.25 is the absolute zero on any networking scale, the scale starts with X.25 at -273degC and goes up from there.
The ironic thing is many telephone companies ended up using ATM to serve ADSL. My childhood home in rural Alabama still only has one terrestrial internet option and that is a 6 megabit ADSL line from AT&T (originally Bellsouth) served out of a remote terminal that is fed by an ATM circuit from the Central Office. My brother lives in that house and is prepared any day to finally get a notice from AT&T that they're discontinuing it
These days I think all of AT&T's flavors of DSL, including their IPTV-supporting VDSL, is considered 'legacy', but for the longest time their "IP-DSL" was the future, and for 15+ years they've been trying to shed this ATM-based DSL