If I recall from a book interview, a key problem was that they were given the budget to shoot the pilot on location in Washington State, which was amazing and atmospheric. But then the network sat on it for a year. I think Lynch and Frost had all but given up on it by that point. Then the network came back and green lit a season, but Lynch was by now already in pre-production on the film Wild at Heart. Still, they decided to go ahead, with Lynch's time and creative availability being limited, and in order to make it work while filming Wild at Heart they set up production on a specially-created sound stage in LA, which is why almost every shot is an interior in the subsequent episodes (peppered with previously-shot footage of the Pacific North West). A lot of what they did paved the way for how many series are made these days. But the whole thing ended up being a compromise, which Lynch tried to fix when Showtime gave him the chance to do the prequel series 25 years later.