TL;DR; Yes and yes, but.
- CD-ROM Mode 2 offers all 2336 bytes of a CD-ROM block for user data.
- By default all CD-ROM drives can read Mode 2 disks as well
- Mode 2 CD-ROM have been produced, but it never really took off.
- Mode 2 is not raw, but still incorporates basic error correction.
CD-ROM has error correction so that in the event of a slightly scratched CD, you won't lose any data.
CD-ROM use error correction on two level. First there is the basic LEC, as defined for basic CD-DA (Digital Audio) format in the Red Book. Second there is Mode 1 ECC as defined in the Yellow Book for CD-ROM.
For Audio-CD the Red Book defined a continuous bitstream separated in tracks. This format already includes error correction. It was the Yellow Book that defined individual addressable sectors. Two modes were defined
While Mode 1 is the most common data format, Mode 2 was used for some video/audio data storage, but never became much popular. Both modes can be mixed within the same data track.
Mode 2 did not only leave out ECC, but as well error detection. This got modified with the 1991 CD-ROM/XA format, which is essentially using a Philips CD-I format, now called Mode 2 Form 1/2:
But video uses lossy compression anyway. So it seems that when you are playing video, it would be more efficient to gain access to the raw bitstream, and have more bits per second to use for the error correction built into your video compression.
Lossy compression doesn't mean no error correction, but reduction in data bandwith by dropping information on purpose. A lossy compression does, per se, not include any error correction Involuntary lost information will destroy its usability the same way as with lossless formats.
Also, switching from Mode 1 to Mode 2 only delivered about 14% more bandwidth. Not really a gain worth much, especially not the risk of damaged data.
Is this something that was done, or optionally available, on early nineties PCs?
Mode 2 was present on all Yellow Book compatible drives, so essential all.
And beside some special formats, Philips CD-I did store video using (their version of) Mode 2 by default.