Honestly, this subject could be a thread unto itself, though I suspect it might get a little heated.
But, speaking personally, I first picked up the guitar in the late 90s, in large part thanks to grunge, though with a healthy dose of blues in the background as well. I think… I mean, part of it is as simple as that grunge wasn’t really as anti-solo as it’s made out to be; a surprising number of Nirvana songs do have lead breaks and while there’s a lot of grunge bands where solos weren’t a big part of their sounds, there were enough where there were, particularly on the heavier side - Smashing Pumpkins, Soundgarden, Alice in Chains, Rage Against the Machine, even some stuff like Days of the New - where I don’t think writing the whole movement off as anti-solo is really fair.
As far as why the solos were less over the top than in the shred era, I think calling that jealousy and insecurity is too simple - again looking at Cobain, he was coming out of some sort of an intersection between the Beatles and punk rock. Flashy technique was kind of the antithesis of the latter, so I kinda doubt young Kurt ever spent time with a copy of Rising Force and just got frustrated and wrote “Smells Like Teen Spirit” because he couldn’t play “Black Star” - it probably wasn’t even on his radar. And some of those guys were pretty unabashed about having spent some time working on technique - Kim Thayall talked about it in a couple interviews I’ve seen and Tom Morello probably could do more of a shred album if he wanted to, he just went in a very different direction with his band.
If I was a late 80s shredder I’d be tempted to call the 90s less of a reaction to the 80s and a desire to do something different and I could absolutely see the temptation of writing off the change in the way guitar was showcased in a band as about jealousy. But, that feels too simple. I think it really was a bunch of different people, with very different musical backgrounds, kind of came to the same place where they wanted to do something different than the technique arms race.
And, frankly, having that pushed underground for a while probably wasn’t a bad thing - grunge was still on the airwaves when Rusty Cooley’s debut came out, and some of Joe Satriani, Andy Timmons, Steve Vai, and John Petrucci’s best (IMO) recorded work came out during the 90s and 00s.