I would agree with the others who already replied that it was the latter, i.e., there wasn't a way to make all transactions totally anonymous. If you look at the protocol, you can see that there is no obvious way to modify the protocol so that it doesn't have transaction history.

For anyone reading this thread, I highly recommend the original Bitcoin paper:

http://bitcoin.org/bitcoin.pdf

It easily understood by anyone with the equivalent of first year university courses in computer science and mathematics, and it is just nine pages long.