Medieval art is not "poor quality" in my observation. It's often quite carefully done and ornate. Thus your theory about "done too well being idolatry" (paraphrased) does not hold much water in my opinion.
But that art it also highly abstract. The lack of perspective seemed to provide a symbolic feel to the images as if they are intended as icons or pictograms rather than literal images.
It may be they did that to make it easier to convey a story or social rankings to the uneducated masses. If you want to show a sequence or social rankings, for example, then perspective tends to get in the way because it would hide or "distort" the importance or order of things because it's affected by physical location rather than symbolic "location" in rank or time.
Look at a typical Windows desktop: the icons are rather flat and/or half-hazard in their perspective because they are not intended to mirror reality as their primary goal. (Well, okay, MS does lack art talent also
Similarly, Sunday paper cartoons tend to down-play perspective because they are tuned to show a story, not a physical scene. Parts that help tell a story, such as faces, eyes, mouths, and hands are often bigger than normal relative to the rest of the body.
But, I do agree with your general premise that the purpose of art changes over time or per culture and it heavily affects the style.
It's also interesting that after camera technology become wide-spread, then the art of the day resorted to being more symbolic (cubism, impressionism, etc.). This is because cameras made realism a cheap commodity such that (well-done) symbolism was the new status symbol and difference maker.