Blue had better Pokemon sprites (graphics).
So in Japan, it was originally Pokemon Red and Green. The original third version was Blue, with bug fixes and some updated Pokemon sprites.
Japanese Blue was used as the base of the international Red and Blue versions, but for some reason they included the original sprites in international Red version. Maybe to make more differences between international Red and Blue?
Yellow was actually a fourth version, lol.
This is also why the GBA remakes were Fire Red and Leaf Green.