I'm not sure I'd agree that the 1996 look "didn't work", I don't think it would have reached TV screens if it was that bad. I imagine whoever running Channel 4 by 1999 just wanted a new look - remember, that package only lasted three years as well before they refreshed the idents and presentation in 2002, and the 2004 look lasted until 2009/2010 before they refreshed the surrounding presentation.
I had no problem with the 1996 Channel 4 ident - but I hate what they did to the logo in 96.
The 1996 idents were pretty successful - 3 years is pretty decent. When they moved it from a circle to a box I just despaired (I REALLY hate boxes). Then finally in 2004 the logo was free from circles and boxes and the world was right again.
I do agree with the point however that the current run of idents on Channel 4 will not go on for long... they are tired already... so what you can bet on right now is that they are absorbing the reaction to the current ones and working out what to do next. The idea of not showing the logo on screen will remain for a while... but the idents will evolve and may perhaps get even weirder.
Look, BBC TWO and Channel 4 have wonderful unique logos - I just wish these design companies would just strip away all this "be risky" nonsense and just KEEP IT SIMPLE.