I think I know what you're saying. (I guess... ) In order to use textures with the nowadays game engine standards in mind, thus, lighting, shadows, occlusion, etc. there should be one diffuse texture (the color map > 3 color channels - R/G/B), one normal texture (the normal map > 2 "color" channels R/B) and optionally bump maps (one "color" channel - could be mixed in the normal map... as "G" channel ? I think Alan Wake was doing something like this... ), occlusion maps, specular map, etc... Not only that, but many (or all I think... ?) textures should be "averaged" by texture artists in order to "convert" them from multiple baked instances into something closely resembling the diffuse map (original intended color map). The one slight "advantage" here I suppose would be that many textures are "duplicates" (tiled most of the time, although in the PSX game itself it's just giving the appearance of tiled textures, since every texture it's being it's own instance being pre-baked multiple times for multiple use instances... ) So many textures are just the same "base texture" but with pre-baked shadows, or lighting, or maybe even reflections... Yep, seems a lot of work, but I think it's "doable" with the help of a few decent texture artists. Many times there will be tens of textures that could only be done once (then, either duplicated and "rename" to the original textures names, either through the game engine one texture could be mapped to a number of predefined polygons... by indexing the corresponding replaceable texture names originally assigned to those poly's ?)

Anyways, this would be a distant future thing to consider Meanwhile, PSX pre-baked GFX should be totally fine