Was the pinnacle of practical bike design attained in the late 80s - early nineties?
Probably not. What practical bike design means to me might different from you.
While I agree with the sentiment and opinions in the OP, they tend to idealize attributes of the era.
As for bending or hammering parts back together, stamped steel shifter clamps, which were common, are an example of something definitely not the pinnacle of design.
These parts, not only heavy, would deform rapidly and dysfunction terribly. Sure you could bend them back, and then they would deform faster than the last time you bent them back. It would drive a real mountain biker towards Suntour's XC pro shifters.
Another design from the era, hailed as a good thing in the OP, are threaded headsets. This kind of headset has been abandoned for a lot of good reasons. I too can romanticize these, but come on. they weren't that great. As far as mountain biking goes, they wouldn't hold the steerer tube and bearings properly adjusted for long periods of time on rugged trails. We would have to bring large wrenches on rides to address this problem. Eventually, in that era, aftermarket clamping nuts were designed and sold at reasonable prices to solve this problem, and became widely available just before the Ahead-set system arrived.
Quill stems can be most elegant and aesthetically pleasing I agree.
Maybe the early 1" Aheadset mountain bikes are in the pinnacle bubble.
Another thing I do not remember so fondly are the threaded freewheel clusters, and going further back, the five speed thread-on sprockets. Servicing these was much more difficult than the XD and HG and newer designs of today.
Cup and cone bearings, multiple cone wrenches, etc. vs cartridge bearings, for things like bottom brackets and hubs are functional and readily adjustable, I'll give you that. But as anyone can usually tell, cartridge bearings of various types roll smoother and bear the forces applied to them better when properly installed.
Cables and housing on the surface don't seem to have changed that much though. I did mess around with Gore cables for some time (which are not of the era), and there are expensive rigid housings made of machined aluminum pieces, and teflon coated cables, and pulleys to go on the rear derailleur and rim brake arms to overcome cable bend friction. The reason these aftermarket products existed was because there was something left to be desired in the way cables operated. And that fact is evidence that this is not the pinnacle of bike design.
Now that 1x drivetrains are mainstream, to point out in passing, observe that most shifter cables are in one long piece of housing which is carefully routed through the frame and minimizes bends that cause friction. It's better compared to the older segmented exposed cable routing of the era. I remember having to change cables and housing many times more frequently than today.
Cable routing schemes were an arena for great variation in the era. Originally most were routed under the bottom bracket with exposed cables dragging against a screwed on plastic guide. These really sucked balls in my opinion. The smarter riders back in the day gave up on these and did their own things to the bikes. There were also pulleys that hung from stems, and holes in the stems for the front brake cable. Front brakes always benefit from the proximity to the handlebar, so that wasn't a big issue. The problem was always the cantilever rear brake circumstance, which sometimes went through brazed on tubes around the seatpost or hangers suspended from the seatclamp or brazed onto the seatstay bridge etc. All of these solutions and others had their advocates, but the whole thing was a pile of it. There's no way this holds a candle to the good hydraulic brakes of today.
Even grips, handlebars, pedals, and saddles are better today. These points of contact, simple as they may be, have a huge market of cyclists readily interested in incremental refinements.
However, I will not argue against the frame designs, their geometry, materials, and construction. It is a testament to these bikes that they still work and may outlast the human race itself.
Long live old bikes, and long may they ride.