I think the original recipe for a martini is 2:1 (Maybe 3:1, going off memory here) with a dash of orange bitters and a twist of lemon peel. I don't know when people started adding olives, or personally, why.
Martinis used to be one of those drinks I always wanted to like but just couldn't quite warm up to. Found out it was due to bad vermouth primarily, and secondarily that olives shouldn't go in drinks. M&R Rosso is pretty good stuff, and what I prefer for manhattans if I can't find punt e mes, but M&R dry sucks balls. Noilly Prat is good stuff though. Adding a dash of orange bitters and lemon peel instead of going with an olive totally changes the drink as well. I find now that instead of going easy on the vermouth, I prefer a 3:1 ratio.
One should keep in mind that the flavor profile of gin and vermouth has changed over the years. I think that might explain to some degree why people used to like more vermouth in their drink back before prohibition than people do today.