All the early metropolitan or long-haul fiber (mostly SONET) networks were digital aggregations of various circuit-modes (DS*) in those days. It made sense since the phone network was pretty much the only long haul network around and even the pure-IP networks didn't yet have enough of a market for alternative protocols. I've been out of the core-networking loop for awhile, but my understanding is that most modern long-haul networks are ethernet over OTN.
The phone companies had enormous sway over the development of these longer haul protocols. The debate around packet sizing almost always favoured smaller cells (especially ATM), which was more ideal for voice - with the added overhead for more standard IP packets. They were also often very connection-oriented, with all the extra equipment overhead required.
Circuits meant for IP didn't convert digital to analog and back unless they had to share the line with a phone at one end. If you had digital connections to both ends of a digital circuit, you'd use all the bits for data.
The phone companies had enormous sway over the development of these longer haul protocols. The debate around packet sizing almost always favoured smaller cells (especially ATM), which was more ideal for voice - with the added overhead for more standard IP packets. They were also often very connection-oriented, with all the extra equipment overhead required.