The reason they changed the rules was because it was a "genuine" production AWD car. The Audi "Quattro" and AMC Eagle are considered to be the first production, truly AWD cars ever made/sold. The reason AWD rally cars weren't allowed prior to that was because nobody was making AWD cars at the time.
In motorsports the first successful AWD vehicle was a hill climb car made by Spyker, a Netherlands based car company still in existence. It is also credited with being the first V6 powered car.
There had been previous attempts to make AWD race cars (including Indy cars) but the technology at the time wasn't there to make them lightweight enough to be effective. These "AWD" cars were really just non-selectable 4wd t-cases and a drivetrain similar to a Jeep.
The AMC eagle was actually built using a Jeep-based drivetrain. What made it a truly AWD car though was that its t-case used a viscous coupling and allowed for that slip between the front a rear axles that makes AWD so effective.
The Audi "Quattro" setup actually used a center differential and was the first to be used that didn't need a t-case at all. Thats what made it so effective and allowed it to be packaged into smaller cars.
... I got a bud that made $300 in a day doin that.
