You definitely want to use a little reverb in a game where the entire thing takes place in the halls of a large castle. They just didn't have a very good reverb effect and it was used with a heavy hand.
It's also good to use because yes, it does help mask any unwanted room noise.
But being that the vocals were recorded in a studio (since this was before the days that every VA had a home recording set up) I would say they did this as an atmosphere effect.