I do wonder why he was introduced, presumably Otos's puppeteer, Dave Chapman, wanted to move on but I don't know why they felt the need to directly replace the character with another straight away rather than wait for a bit then come up with something a bit interesting. But then going from Otis to something like Hacker would have jarred a bit
Presumably by 1999 they'd had puppet presenter(s) on a permanent basis since 1985 so it was probably tradition to have one, even if it was something as bland as that. Think he was dropped by the time the CBBC Channel launched and I don't think they had a puppet character again on the network until Oucho came along.
Of course Hacker wipes the floor with the lot of them in terms of durability, apparently ten years now he's been there, and Gordon the Gopher only racked up eight overall. Wiki suggests Basil Brush is the longest serving CBBC puppet but of course he was never a regular "presenter" like Otis, and he didn't start on the BBC anyway, Basil Brush was actually created for an ITV show.