Was looking good more important than winning?
If you look at old photos or paintings of people doing sports, they are usually wearing ridiculous amounts of clothing that severely impacts their performance.
Here's a drawing of people playing tennis from the 17th century lots of baggy clothes and layers that impede movement and heat leaving the body.
A photograph from 1900 of people playing Tennis. People are wearing trousers, shirts, vests and ties.
Female archers at the 1908 Olympics trying to do archery in full dresses.
And a follow up question, why did no one think for decades "Hey if I wear less clothing I'd have an advantage over everyone".
The basic answer here is that people have historically been (and let's be real, they are today) unwilling to go very far outside of the bounds of what is considered an appropriate amount and type of dress to practice a recreational activity. This is particularly true before the rise of professional sports, in which "performance" is key because the individual athlete can make more money in sponsorships or prizes, or can achieve a high degree of fame from breaking a difficult record. If a group of Victorian friends were playing tennis together, "how can I BEAT THEM ALL??" was not that pressing. The purpose of athletics was to exercise your own body, to take in fresh air, and to compete in a fun way.
The concept of what we would call "sportswear" only dates to the end of the nineteenth century, when there was an explosion of new opportunities for middle-class people to practice athletic pursuits, new games that were being devised or recodified for popular play (like tennis), and new inventions and innovations for individuals to play with outside. I've written an in-depth look at what was specifically recommended for bicycling dress at the time here; on the whole, people started with how they normally dressed and altered it to make it fit their needs when playing a sport. This meant:
keeping warm and dry in the wind, rain, and cool air - generally by wearing wool, which is difficult for water to penetrate and is a good insulator, and by having multiple fitted layers that would keep the skin covered
keeping cool in the sun - by wearing white linen or white cotton in clothing and straw or cotton hats, all of which are lightweight and breathable materials, and by wearing fewer layers in general (note the men in your tennis photo, who have on white shirts with no waistcoats or jackets on top)
allowing necessary movement - by wearing knickerbockers and plus-fours that you couldn't step on, or skirts cut above the ankle, or divided skirts, or bloomers, or shirts/dresses that are looser in the armscye (where the sleeve meets shoulder) and/or elbow
The female archers in 1908 are not "trying to do archery" - they are shooting! Look at the woman in front: her left arm is fully extended and held out at shoulder level and her right arm holds the arrow fully nocked and drawn. The fact that she is wearing a hat, a corset, and a long skirt did not prevent her from competing at a high level.
And a follow up question, why did no one think for decades "Hey if I wear less clothing I'd have an advantage over everyone".
I think the reverse question is more apt: Why do people think that clothing was so oppressively immobilizing in the past, if athletes managed to compete in it without completely stripping down?
