Fatalities were part of the overall shock value of MK that got it attention. In MK1 it was great because the game itself wasn't that good, but the blood, gore, and fatalities kept people interested.
MK2 had a complete look so the fatalities were a smaller part of its popularity compared to the quality of graphics, sounds, backgrounds, and stories.
MK3 introduced people to top notch gameplay and Fatalities ended up in the back seat.
UMK3, they could have rereleased a championship version with netplay, noob playable, and no fatalities and it would have been great, because by that point it became about good gameplay.