
If you look at narrative films made in the first decade of the 20th Century you'll be struck by a very odd aesthetic anomally. Scenes shot out of doors will often be dynamically composed, emphasizing spatial depth in the image -- they look modern and can be extraordinarily beautiful. Scenes shot on interior sets will, by contrast, be framed head-on, creating the impression of a shallow space -- this, combined with the obviously painted sets, mostly using flats, looks decidedly cheesy to modern eyes.
Why did audiences accept this violent contrast of cinematic practices within the same film?
One reason, of course, is that the interior sets reminded audiences of the stage, where painted sets and proscenium framing were familiar. They could think of these scenes as filmed stage-plays, which is how story-based movies were often defined and sold. The exterior scenes, on the other hand, reminded viewers of pre-narrative cinema -- the "actualities", short scenes of picturesque places and real events, which were the primary content of movies presented as novelty attractions.

These actualities tended to be agressively "cinematic", emphasizing the illusion of spatial depth to show off the magic of movies -- their ability to create the convincing illusion of a real place on the other side of the screen.
Novelty-attraction actualities were often part of a theatrical presentation which featured live performers as part of a variety bill -- so viewers were accustomed to an alternation of cinematic actualities with theatrical stage-bound scenes.

The narrative structure of early story films was apparently enough to knit the two types of cinematic practice into an aesthetic whole for viewers of the time. Indeed there's a curious Edison film from around 1904, not part of the regular Edison release schedule, which shows a group of people making its way by various means of transport from one end of Manhattan Island to the other. There's no connecting narrative -- the shots just seem to be a series of "actualities" linked only by the presence of the same characters in each sequence. It's been suggested by film scholars that these sequences may have been shot as "entr' acts" for a stage play, showing the play's characters moving from location to location in the story -- something to pass the time and amuse an audience while the stagehands shifted sets behind the projected images.
If in such a production you just replaced the scenes on the stage sets with filmed interiors, shot head-on against painted theatrical backdrops, you'd have a pretty fair paradigm for an early narrative film.
Even imagining how such anomalous cinematic approaches could have been reconciled for viewers within the same film, it's hard not to see the results as crude. But such anomalous approaches have almost always been a part of cinematic practice -- and the momentum of narrative has always been able to reconcile them.

Look at John Ford's Stagecoach again and see how stunningly photographed images of real locations alternate with studio work (above) in which sets and back-projections stand in for exterior locales. It's objectively weird, aesthetically inconsistent, but our eyes, accustomed to back-projections in films of this era, don't read it as such.

The conventions are always shifting, of course. The studio-built interior sets of Stagecoach (above) are fully three-dimensional and convincing as actual locations -- a far cry from Edison's patently two-dimensional interior sets painted on flats. But Ford's back-projection exteriors are convincing only to the degree that we choose to be convinced by them, as Edison's audiences chose to be convinced by his artificial interior sets.
The history of the shift from "theatrical" to fully dimensional interiors in movies would be fascinating to chart.
One of Griffith's main formal concerns in the Biograph years was developing a way of staging and photographing interiors on sets in spatially interesting ways, to create a stronger illusion of being in real rooms -- but he never totally abandoned proscenium framing.

Why?
I'm beginning to think that proscenium framing for interiors continued to have a degree of glamor for filmmakers throughout the silent era, by evoking the prestige of the stage.

Twice in Erotikon, from 1920 (above), which has elaborately constructed and convincing interior sets, such a set is introduced by a wide, head-on proscenium type shot -- before Stiller moves in and starts shooting the room as though it were a practical location, sometimes even shooting in mirrors that reflect the wall behind the camera, utterly abolishing the theatrical mode by showing us the "fourth wall".

In Peter Pan, Herbert Brenon (above, with camerman James Wong Howe and Betty Bronson) does something similar with the opening sequence in the nursery -- which he starts out showing only from angles that would have been available to members of an audience seated in front of his set, but then proceeds to penetrate from angles only available to performers inside the set.
Both Erotikon and Peter Pan were adaptations of popular stage plays, and the filmmaker in each case may have wanted to remind viewers of the film's prestigious theatrical provenance.

Von Stroheim seems to have been the first film artist to abolish the theatrical mode for interiors as a matter of basic aesthetic principal, and he was followed in this approach fairly consistently by Murnau as well. From them derive the dynamic spatial interiors of Renoir and Welles.

[With thanks to shahn of sixmatinis and the seventh art for a recent post which got me thinking about this subject again.]