Enter the 36 Chambers, and more importantly "Protect Ya Neck", sounded the way it did because of two reasons: The studio they recorded in was a cheap, shitty studio and RZA really didn't know what the fuck he was doing. The mastering engineer, Chris Gehringer, was quoted in an interview with Spin as saying "It was a little bit of a shit-show! It wasn't the cleanest of audio, and it wasn't audiophile material, and they didn't spend a lot of time miking and recording stuff, but sometimes art shows up in funny ways."
Obviously he got better with time, and as he got better and the money started rolling in they switched to better studios with more modern (cleaner sounding) equipment. If you notice, Method Man's album is sonically far better that the original Protect Ya Neck single and Enter the 36 Chambers. That's because of RZA's improved technique behind the boards and, IIRC, the studio they recorded out of was running ADAT.
Meanwhile, the west coast cats of the same era like DJ Quik, Dre, Ant Banks, and 'nem already had the budgets for better equipped studios from jump, so naturally their shit sounded a lot "cleaner"; they were already on ADAT and 16 bit samplers, etc where most of NYC were still believers in dirty sounding 12 bit SP1200's, MPC60's, S950's, and 2" analog tape (referenced by Q-Tip on "Midnight" "I think it's hard to find the words on how I feel/
I paid about a deuce twenty for the Ampex steel" where the Ampex steel refers to 2" Ampex reel to reel tape which ran about $225 each back then).