Even today, Japanese animation studios still use pencil and paper to produce animation. Why can't they switch from that method and proceed to digital hand drawing for animation production, since it is much less time consuming?
Here is an interesting article about how the anime production process works.
Here's an excerpt I found particularly interesting (and relevant!):
[T]he crucial thing is that the frames are still initially drawn by hand, and no in-between animation is simulated by a computer. There are some animators who draw 2D animation directly onto computer, but in anime this is largely restricted to in solo animation productions rather than commercial anime. The industry prefers this because the animators are generally more comfortable and able with this method, and it allows easier checking and correction of frames under sometimes tight schedules.
The animation line works require high precision, which in turn means better drawing tablet/computers are needed.
Much in-betweens are produced overseas. Having been at a small studio in China, I feel that the studio will not be able to afford such device for every animator.
Also one need to take into account of how much changes when drawing digitally. Tablet screens have very low friction compares to pencil on paper, which means complete relearn how one uses muscle and maintains stability. This is a no-go for established studios, as they are constantly on time pressure.
Coloring requires less precision, and can be performed by a mouse, so those are done digitally in the studio.