Although I have to say the 2nd gen has the 3rd totally beat on that and only that feature. Their back windows roll into the tailgate and then the tailgate flips down. I have no idea why Toyota changed that awesome feature along with no more factory tire swing-aways for the 3rd gen. I miss being able to put mattresses or long boards in the back without having the leave the hatch 1/2 open and bungied-tied down. Everything else about my old 2nd gen pales in comparison to the 3rd gen tho.
Re: Tailgate vs. Liftgate:
I used to be of the same mind as you. In fact, one thing I've loved about my pickups has been the tailgate - it's very useful when camping, hunting, just hanging around.
HOWEVER, there is a huge flaw in the roll down window/tailgate setup: If the window fails in the up position, you cannot open the tailgate! We had this problem on our M1009 CUCVs (i.e., mid-1980's Chevy Blazer with a diesel engine) in the Army. The tailgate was a maintenance nightmare and if it failed in the field you had a truck that you couldn't put gear into the back of - MAJOR PITA!
And failures were not unheard of in other vehicles. My 2nd vehicle was a 1967 International Harvester Travelall with the rear window/drop gate. I had the same problem - the rear gate regulator was broken so if I wanted to lower the tailgate I had to unscrew the cover to the tailgate, manually lower the window, and then open the gate. I was too broke to get the regulator fixed and ended up selling it with the broken rear window.
At least with the liftgate setup on the 3rd gen, a broken rear window (in the up position) only means you have a liftgate like every other SUV or minivan out there - you can still open and close it like normal.
As for why SUV manufacturers got away from drop tailgates, my understanding is that it was because the suburban mom's who were using SUVs for shopping didn't like reaching all the way across the tailgate to put grocery sacks in the back or take them out. I think the liftgate is also easier to manufacture and seals up the back end a little tighter for better noise control.
I've actually been considering making an interior "tailgate" for my 4runner. When I do I'll post the build here!