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The movie talks about how they tried to make the matrix perfect and they rejected it. Its in one of the scenes with smith interrogating morpheus is i remember correctly

Smith (torturing Morpheus): "Did you know that the first Matrix was designed to be a perfect human world? Where none suffered, where everyone would be happy. It was a disaster. No one would accept the program. Entire crops were lost. Some believed we lacked the programming language to describe your perfect world. But I believe that, as a species, human beings define their reality through suffering and misery. The perfect world was a dream that your primitive cerebrum kept trying to wake up from. Which is why the Matrix was redesigned to this: the peak of your civilization."