Ethereum came as a split from the colored coin approach. With colored coins people realized that they could create assets on the Bitcoin blockchain. Each satoshi could represent a single asset (1g of gold for instance). They even implemented OP_RETURN so you could add details about the underlying asset.

One big thing many people working on colored coins ran into was the limited amount of bytes that could be used for each transaction (a lack of creativity left them wanting to fix this limitation with more bytes instead of working with second layers). The possibilities of what could be added to to each transaction if there were more space was discussed. The golden idea was to have enough room for turing complete programs on the blockchain. Vitalik took on the task of enhancing the colored coin approach on the Bitcoin network to allow for turing complete code. The Bitcoin community became excited about this Ethereum colored coin approach and put a lot of support behind it.

Then Vitalik decided to shit all over Bitcoin and everyone who had supported him up until then and take the easy way out by creating a new coin called Ethereum with a whole new blockchain that had enough room for these turing programs.

There was a reason that Bitcoin limited the size of transactions.