If memory serves, the reason why he was sent to developmental was because his weight was problematic and he had some attitude problems. I vaguely remember an interview with Undertaker where he insinuated that Big Show had talent, but was lazy.
Obviously there reached a point where he got a lot better and improved his attitude though. I think it was a little bit of both Show's problems and how WWE was using him that kept him from reaching his full potential. When he first came to WWF, he was billed as Paul White. Then it was changed to Big Nasty or some stupid shit like that. That's an even worse name than the Big Show and I agree that the name is a little too silly and gimmicky.
WCW didn't utilize him very well either though. It should be noted that he was incredibly athletic during that time period, doing drop kicks, jumping off the turnbuckle and even kip-ups. He looked good, although his weight problems started being an issue even then. WCW had a much lazier atmosphere, so it wouldn't surprise me if Show picked up some bad habits from them. But anyway, Show had a pretty good start, but quickly became relegated to jobber status. Much like now, he'd win matches against other jobbers, but rarely the matches that counted. He was usually used to put others over. Yes, they still made him look like a threat. When Warrior took him out, it was treated like a big deal. I remember Goldberg wiping out NWO (who was bullying DDP) and the show ended with a big showdown between Goldberg and the Giant (it sadly ended before things got physical between them). But is that any different than now?
Big Show is usually booked to look like a threat. He just puts over the more relevant people, like Braun Strowman or Roman Reigns. I've always been a huge fan of the guy though. I think he's actually a very underrated performer, as on the mic, Show can either be really funny or menacing. He has a great physical presence (even when he's fat) and performs pretty well in the ring, very well for a big man.