Just producing a steady frequency doesn't mean one also has components working at those frequencies for other purpose than (analogue) generation, amplification, shaping and detection - like the sequential logic operation needed for a CPU.
Rudolf Kühnhold, at the Kriegsmarine Versuchsanstalt, did build as early as 1933 transmitters operating at 2.22 GHz - it still took a 'few' more decades until logic would operate at such speeds.
Other Answers already provided good lead of technical reasons about this. But we are often way too much focused on the technological side of development, ignoring that it always happen within a business framework: Every development needs an adequate market - especially if it comes with huge upfront investments. Or more direct:
There is no reason to build the fastest CPU possible for mass market devices.
All worth to invest for a good sale is one a tad faster than the competition.
The 1990s are a story of good enough and Intel's hubris in overestimating their ability to twist licence contracts, underestimating the ability to scale their own designs as well what progress competition may yield. Also, with the late 1990s you picked roughly the moment in time when the MHz-Race started to gain speed. So let's do a (not so) quick look at the time line:
Licencing CPU designs was a major part of Intel's business since 8080 days, but already in the early 1980s it became obvious that not only the PC market will be the biggest single CPU market, but as well that their licencees did make nice profits by delivering better performance at lower prices. While Intel provided the 80286 at 5 to 12 MHz, AMD provided versions up to 25 MHz. Making pressing the turbo-button worthwhile :)
So when introducing the i386 in 1985, they stated that existing agreements would not cover this brand new chip, so no schematics were shared, Intel wanted to be the sole proprietor of the new 386 world (*1). What followed was a long sequence of law suits, reverse engineering, more law suits, technological advance, more law suits, and Intel loosing the lead in every step over and over again.
After not coming to an agreement AMD for one started to reverse-engineered the 386 while also suing Intel for upholding the existing licence as the 386 was an obvious incremental improvement to the 286.
Intel did manage to slow that project down for considerable time, but in 1991 introduced their Am386 at 40 MHz - Intel only ever had the 386 increased to 33 MHz. While Intel had in the mean time (1989) introduced the 486, it was quite expensive while not being that much faster. An Am386-40 would compare quite well to an i486-25 at lower CPU and board cost. So AMD snapped a large part of the strong 386 market plus eating into low end 486 sales (especially all 486-SX).
Intel countered with another law suit - in addition to one running about the 287. And lowered their 486 prices considerable. When the 287 one was decided in 1993, the jury not only granted the rights for the FPU, but everything up to and including the 486.
Which came perfect for AMD as they just finished their Am486, a fully compatible one (including the original Intel micro code). Right from the start AMD offered the same speed grades as Intel plus a 40 MHz bus version.
What followed was a short race with double and tripple clocked 486 versions where AMD again collected a good part of the market.
But that law suite also did set the bar for Intel to 'finally' get free of competition as it limited the existing licences to the 486, excluding any Pentium or later. This lead directly to the next overestimate of their abilities: By assuming that their Pentium was so superior, in 1992 they planned a roadmap consisting of a Pentium slowly creeping up from 60 to 166 MHz over the next 6 years. They were so confident that the P5 design will rule the market,that they even started to develop the independent (and forgotten) PentiumPro (aka P6) line, reserved for expensive high end workstations and servers.
Except, the AMD's 486 performed way better than expected. Tripple and quad clocked improved 486 designs (*2) turned lower end Pentium (60..90) into letter weights. Same performance, less than half the CPU price and cheaper boards (since still 486) made them a great seller and cash cow for AMD.
Intels rescue was the Pentium MMX - a side project developed in Israel (*3) - which combined P5 and P6 architectures into one being considerable faster than either (*4).
Since they couldn't clone the Pentium, AMD did come up with their own design, the K5. While quite comparable in integer performance to Pentium at same or higher speed, it failed on FP performance - and didn't scale as well (*5)
At that point we reached 1997 and Intel tried to break free with the Pentium II. Leaving the Socket 7 for Slot 1, where CPU and separate Cache were placed as on a PCB as a processor Module (*6). Having such a great idea and product, Intel felt again that they would for sure rule the market for the next 5+ years. Roadmaps of that time showed the Pentium II slowly going from 233 to 400 MHz over the next 4 years (1997..2000). What a cosy world that will be ...
... except, a month before Intel introduced the Pentium II, AMD brought the K6, on par with the PII at similar clock, scaling as good,but still only needing a Socket 7 (Pentium type) motherboard. The K6 and it's follow up K6-2, K6-III did eat deep into Intels market share. Intel tried to counter with the Celeron to gain back the low end, but never compete always with lower performance at the same price point.
And then it was 1999 (*7) and the Athlon blasted everything Intel could deliver. And it even scaled better than Pentium II or Pentium III. It was not only when the point when the MHz race really took off, but also the first time that a CPU company raced itself. Unlike Intel, who tried twice to slowly squeeze out the market, AMD raised the mark in just 9 month from 500 MHz in June 1999 over 700 MHz in Oktober, to 1 GHz in March of 2000. All while lowering the price.
The rest is ... (*8)
So, long story short:
With the historic exception of a few years between 1999 and 2003, being just a bit faster is what sells your product and competition is what drives that spiral.
*1 - IIRC only IBM was granted a licence.
*2 - Like the final 5x86
*3 - Israel is kind of famous to develop 'unimportant' CPU variant that happen to change the course - starting with the 8088 :))
*4 - No, that is not about brighter colours and better sounds, btu real speed up. After all, noone had a use case for the MMX part at the time.
*5 - Lucky for intel, as the Pentium MMX also didn't scale well.
*6 - Essentially the same idea that got reborn recently with AMD Ryzen's chiplets.
*7 - And right after the questions sample date :)
*8 - We all know History doesn't repeat, but then there came AMD Threadripper and Ryzen :))