Why did UI's turn from practical to form over function?
E.g. Office 2003 vs Microsoft 365
It's easy to remember where everything is with a toolbar and menu bar, which allows access to any option in one click and hold move.
Seriously? Big ribbon and massive padding wasting space, as well as the ribbon being clunky to use.
Why did this happen?
No. Microsoft 365 (previously office 365) is not a web app. They have web apps, and some licenses (the bare bones $6/mo one) only has web apps. But overall the suite of apps can't be defined as web based.
Not to be confusing, but some of the apps are only web apps, but those are "other" apps than you're probably thinking of. Like Planner or Power Automate. The "office" apps like outlook, word, excel and PowerPoint all have desktop and web versions included.