If you put the question this way, than probably StarCraft was the first. Earlier strategy games had little difference between factions, much less in story.

Unless you consider HoMM2 story not as two separate campaigns, but one non-linear campaighn where you make a choice (as your character) whom to serve - Roland or Archibald. In fact, halfway through campaighn you have a choice to betray the leader you serve. And if you choose to do so, you will start "other campaighn".

No. Betrayal level notwithstanding, they're mutually exclusive storylines. If one happened the other didn't. You can't have Archibald be king and imprisoned in a tower at the same time.

They could easily have created two separate game modes: One where the pathfinding is fixed and you can select unlimited amounts of units at once (for single-player and unranked mp), and one where everything except the new graphics is the same - for ranked play and tournaments. Blizz could easily have done this.

But who would they be doing it for? In terms of large groups of gamers, you've got the following:

1) The esports group already mentioned, they want it exactly the same but looking nicer.
2) Those that want to experience the nostalgia of playing the game they used to, exactly as it was, thus also wanting it the same difficulties.
3) Those that want to play the old campaign, but want these bugs fixed (like me). For those guys, there's an SC2 mod called Mass Recall, which takes the SC2 engine, pathing, and graphics, but recreates all the missions, units, cutscenes, etc. near perfectly (except its AI is better, and medium difficulty is hard). Given they've made the core SC2 game free, this means they've also made Mass Recall free
4) Those that haven't ever played the first one, but would like to play it. These guys probably came from SC2, and could probably go down the Mass Recall route
5) Those that don't want to mod SC2, they want SC1, but they want it different to how it was (to a not universally specified extent).

I think group 5 is actually a pretty small group, and Blizzard aren't obliged to meet their demands (even if they knew them).

Well, I guess the closest thing we had was Age of Empires. From what I recall each campaign was about a different faction, set in a different point in time and winning all of them was "canonical" (which was probably also true for several other strategy games with historical settings before it). Clearly not the same thing, though. I can't think of any story-driven RTS games that would have done this before StarCraft (or story-driven games in any other genre, for that matter).