And from what I understand, it’s not due to incompetence; rather, it’s due to not yet having confidence that those optimizers wouldn’t introduce bugs. The SDK and toolchain were very new; SM64’s development itself parallels that of the dev toolchain.
So, better safe than sorry, especially with a pack-in launch title.
Kaze, who did that 60FPS optimization, has commented on other videos about how the CPU isn't fully utilized anyways, so -O2 doesn't make too much a difference in most scenarios.