Legendary Collection was basically a "Base Set 3"; a sequel to Base Set 2. This was a bold move for Wizards of the Coast, considering that Base 2 wasn't well received by the Pokémon TCG community in general. Many believe that the unpopularity of Base Set 2 was the reason why Legendary Collection wasn't called "Base Set 3". Ironically, however, Legendary Collection ended up becoming one of Wizards' more successful Pokémon TCG sets.
To appeal to players, Legendary Collection was the first Pokémon set that was actually built for tournaments. The pack set up has Pokémon of the same type in it, a very useful setup for Sealed Draft tournaments. The set was also built with the Modified tournament format in mind, so old cards that would help modern Modified decks made the cut while considerably broken cards from the past (like Hitmonchan and Professor Oak) were kept out.
To appeal to collectors, Legendary Collection was the first set to include two new trends for the Pokémon TCG - reverse-holographic refractors and box toppers. Wizards took a hint from Magic and made a reverse-holo refractor card for every single card in the set. This trend carried over with Nintendo's occupation of the TCG, and has featured in every expansion since. Box toppers, jumbo sized versions of a number of cards from the set (4 of them in this case), were also inserted in every box.
The Expedition Base Set was originally supposed to be released in May 2002, but it was pushed back to September because Nintendo wanted its release tied with the release of the e-Reader device. Some believed that Legendary Collection was conceived in order to fill the gap between Neo Destiny and the Expedition Base Set.
At Worlds 2002 in Seattle, Professors who volunteered their time to run tournaments were supposed to be given a free box of Legendary Collection for their help. However, because Legendary Collection became so popular, it had sold out before the tournament, to which Professors were instead given boxes of Neo Destiny.
Despite being released in the Neo era of the TCG, the cards are laid out in the Base-Rocket style that they were originally released in.