BSMS, the flared breeches served two purposes. First, the flares kept brambles from contacting directly on the skin. It allowed the fabric to be pull away from the skin so that thorns didn't tear the cavalry/foxhunters up. Secondly, they were loose because there was NO stretch in these fabrics. So, if you wanted to be able to bend over, you had to have a baggy seat. I wore more than my share of flared breeches and still have some of them.
Now, with the addition of lycra to fabrics making them stretchy, the breeches can be snugger. Especially since most riders are not riding in real rough territory. Trust me when I say that today's breeches won't last a moment in real rough terrain. It will just be a bunch of pulls.
So yes, yesterday's breeches were baggy because of fabric and function. However, they DID rub. I know this well.....Todays fabrics are so comfortable with the stretch, you almost feel like you have very little on (if you know what I mean....)