Also recall reading a justification that less formatting should be used in emails and that was part of the UI decision. Don't recall whether that was from Gmail team or a writer editorializing but fact is I use formatting to make my emails more clear to people. This whole new idea of having quick conversations through email feels like trying to shove a square peg in a round hole to me.
For users that like to use the pop out layout for compose, hiding the formatting may be needed to save space.
For users that opted for a full screen layout for compose, the full formatting options should be available as a default given that space is not a limitation.
