There's no reason why something like State Of The Art or Jesus On E's couldn't have been made in 1988 before Shadow Of The Beast.
No technical reason anyway.
You saying "We looked at it and immediately knew how it was done" prooves that "the scene" hadn't accomplished anything like this before.
It's the originality that counts here, the fact that these sorts of effects hadn't been done like this before.
If I was to write Shadow Of The Beast 4 tomorrow and it had a similar look people would say "Well done", but nobody's jaw would drop.