Well, you are right and wrong in the same time. They didn't worry about losses back then but delivery. To deliver power economically over ceratain distance you have to increase voltage to dangerous levels and then lower it again to more usable lower levels close to the users. Transformers could do it. As the voltage and distance was increased the issue of losses become more and more prominent. In addition to leakage loss, the AC lines act as transformers and capacitors against the ground inducing current into ground and that is loss. As the voltage increases the current flows only trough the surface of the wires limiting the capacity etc. The advantage of AC is ease of delivery.
In contrary the DC lines don't induce current to ground, current travels in the whole cross section of the wires etc. They suffer leakage losses similar to AC lines. Problem is delivery to users. So the DC lines are practical only for long distances. In the beginning AC is converted to high voltage DC and on the other end closer to the users back to AC.
Few of such lines are in operation for almost 50 years in Russia because of many Russian sources of hydro power are located in very remote areas. I think some are around 2000 miles long.
There several of them in a proposal and/or project phase in USA and Canada.
Google for DC transmission lines to get more info or just click
Feasibility of DC Transmission Line
