Guessing (again).
The old scoring was based on awarding two separate scores titled something like "technical merit" and "artistic impression". That has been changed, but was the way it was done, when Bonaly was active. Those fancy costumes are also a part of the artistic impression, so artistry is still part of the contest. Otherwise the skaters could wear jumpsuit or tights, right?
Dangerous? I wasn't (am not) so sure about that. May be something like: what could possibly go wrong, when there are six skaters in the rink simultaneously (during warm ups) doing back flips? There's something about sharp blades flying through the air. You don't see hockey players diving blades first through the air either. A goalie or a defenseman often seeks to block a shot sliding like that - but not when airborne (or one skated lifted high up).
The weight of tradition is not to be underestimated. After all, an individuals figure skating (up to something like the 80s) used to consist of three parts, not just the short program and free program as it is now. They were doing something like "compulsory figures" before the short program. Something like: the skater is supposed to do two figure 8s of a prescribed size gliding on one skate, and retracing their path EXACTLY. Afterwards the judges would kneel on the ice, carefully examine the groove made by the skaters blade, and deduct points for all deviations. Needless to say, this part of the competition rarely attracted any spectators or TV cameras.
Edit: What I said about back flips being dangerous doesn't make sense really. I think the dislike is largely aesthetic.