They had created "base cries", from which all the cries would originate from. According to Bulbapedia, there were only 37 base cries for Gen I, and 67 (+30) for Gen II. Again, these base cries were only tweaked and modified to create a total of 151/252 "different" pokemon cries. This explains why some Gen I and Gen II cries sound very similar.
With the release of GBA and better consoles (8-bit sound tech+), the limitation has been lifted to much better heights.