Oh, and in terms of interoperability, both UCS2 and UTF-16 are a big problem. Nobody wants to add BOMs everywhere, but if you don't you have no idea what you're looking at. So you end up with even products built by Microsoft entirely with Microsoft technologies (and thus heavily invested in 16-bit code units) communicating in UTF-8 anyway.
As the original poster said (even if their terminology is wrong in a bunch of places) UCS-2 looked like it might be clever in the mid-1990s. Once it became clear that Unicode's hyperspace would be populated, and UCS2 wasn't capable of handling that, the choice was no longer between UCS2 and UTF8 (where UCS2 delivers some intuitive-seeming properties, although not as many as sometimes claimed) but between UTF8 and UTF16, where UTF16 is completely horrible.