[bradfa]

Wikipedia says EXIF was released in 1995 (https://en.wikipedia.org/wiki/Exif). If you were shooting with a DSLR, say 6 Mega pixel with 8 bits per pixel, the raw output would be 18MB in size (https://en.wikipedia.org/wiki/Kodak_DCS_400_series). In order to rotate this raw 6Mp image you would need 36MB of RAM (input and output buffers of the same size, non-overlapping). Then, after the rotation you could perform JPEG, so that the rotation is lossless. Finally, you could store the JPEG image to disk.

36MB of RAM just for raw image buffers would have been quite expensive in 1995. Simply tagging some extra data onto the image to say which orientation it should be presented in takes almost no extra memory or processing within the camera, some big desktop PC could easily rotate the uncompressed JPEG to perform a "lossless" rotation after the fact (ie: uncompress JPEG in wrong orientation, rotate, present to user).

[bradfa]

Technically, you wouldn't need a full 18MB for the output buffer so long as you perform the JPEG in-line with the rotation and are willing to deal with slicing the image into swaths. So in theory you could get away with like a 1MB output buffer but then your rotation time would depend on your JPEG timing and you couldn't take another picture with the main raw buffer until rotation and JPEG were both complete. It's a tradeoff, time versus memory.