Further, people of this era had little concept of imagination. The vast majority could not read and the only grand buildings they might see were castles or lordly palaces. Northern Italy, The Netherlands, and other prosperous areas had grand public places, maybe some large buildings of a type, but nothing began to approach a gothic cathedral church whose spire would be by far the tallest thing for miles upon miles. To equate these churches with Disneyland or Versailles is not far off base. They were spectacular beyond imagination, How they even managed to stand up (or in the case of Beauvais, didn't) was a complete mystery to people who knew post-and-beam construction if they knew anything about construction at all. The windows streaming in light of blue, red, yellow, green, and gold could not possibly be imagined. Combined with boy choirs singing perpetually, incense, and intricate floor mosaics, the Gothic cathedral was simply awe inspiring.
Cathedrals of this size told a story. Pilgrimage was a big business in the medieval era and people would come from all over Europe to visit the great cathedrals much like Americans do a grand tour of them and/or palaces today. As the vast bulk of these people were illiterate, the churches were all built with a very standard layout to ease flow of pilgrim traffic. One side of the church spelled out the liturgy of the Church while the other side told the Gospel. To do this, windows and mosaics or frescoes were fashioned to show scenes from the Bible. The transept doors would have architraves with one side showing the horrors of Hell and the other showing the glories of Heaven. All along the aisles were small chapels where pilgrims could pray to popular saints and leave donations. There would be Stations of the Cross to pray, and a Lady Chapel to say the rosary. The pilgrims would enter one door and leave the other. Regular celebrants in the center of the nave would not be disturbed by the pilgrim traffic along the aisles and the narthex, the holdover from the Roman courtyard, would allow people to hang their travel hoods and dirty shoes (one did these things barefoot) while preparing the faithful for the wonders inside. The best cathedrals were huge moneymakers and they paid for themselves rather quickly despite the fact many took hundreds of years to complete.
St. Peter's was to change all that. St. Peter's was less a pilgrim church than a summation of all a church should be. Michelangelo's design was changed and changed again by successive architects over the years of its building, but the essential character was not. There were no side aisles, no giant flying buttresses. It's windows would be huge but that was because the building itself would be enormous, over 4 million square feet in volume. To prove itself as the greatest church ever built, it had to be like nothing anyone had ever seen and as the burial place for every pope since St. Peter, it had to evoke the splendor of heaven as closely as possible using every technology available. This one church had to leave absolutely no doubt in the mind of the faithful that all that contrition, all those prayers, all that faith, forgiveness, all the poxes, wars, dead children, famines, plagues, and short lives, that ALL of the suffering of life as a Christian would be worth the reward which awaited in the end.
It also serves to add that European rulers of this time all ruled in the name of the Catholic Church. Since Charlemagne was crowned in old St. Peter's, it was usually the job of the Pope (or a Cardinal) to go about crowing the heads of Europe in the name of God. To exude the necessary authority, the simple robe of a Franciscan would not do. Instead, popes would have to reflect the glory of God on Earth as credibly and opulently as possible. St. Peter's, as their seat of papal authority, had to do the same thing. It had to leave no doubt in the mind of the common man that the pope and his home was as splendid as possible.
This is very much part of the medieval aesthetic. No matter how broke the people were, they wanted a rich and beautiful church and gave enthusiastically even when they had nothing. They understood that while they were largely poor, that at least their pope would be splendid. They did the same thing with their monarchs. People took pride in seeing at least their rulers looking as grand as possible because, by extension, it made them look good even if they couldn't afford a change of clothing. A strong and rich monarch made them feel safe and prideful in their daily life and a similar pope made them feel safe about their afterlife. After all, they would figure, if the pope wasn't the right guy, why would God raise him up to such a high position? Literally, until the Enlightenment and the Reformation, this was common thought and made a great deal of sense to the average Catholic. To many, it still does. To glorify the home of God, the seat of God's representative, was an obligation. Gold and jewels and finest of art were rightful gifts to God to thank Him for the good things in life because when the shit hit the fan, he might just answer your prayers and perform a miracle when you needed one most. Failing that, your devotion in tithe and prayer and following God's laws would assure you a place in a heaven that was guaranteed to be far grander than even the most spectacular cathedral you might have visited once in your life.
Over time, the Vatican expanded as the temporal powers of the pope did. At one time, the Papal States were a large chunk of Italy and all throughout Europe, any church, monastery, abbey, chapel, or cathedral was directly under the sole power of the pope himself (only royal chapels were exempt). They were as embassies complete with their own set of laws and territories, inviolate by even the king. Soldiers nor officials on state business could enter church property without express permission of a bishop or higher. They were untaxed and free to amass wealth as they saw fit and distribute it (or not) the same way. Not all orders saw things the same way. The Franciscans, in particular, emulated the mendicancy of Jesus himself. The Carmelites and Cistercians followed along the same line while the Jesuits and many other orders had no qualms about using wealth to glorify God. In the medieval world, what was richer was more legitimate and deserving of wealth because obviously God favored someone or something that was able to amass that wealth. And if God favored that person or institution, then the average peasant had better do so too because that is what God would want. It doesn't make much sense to us now but then we're way post-Reformation and post-Modern and post-Enlightenment. We're way far away from that sort of mindset for the most part.
To burn the Vatican would be an immense human tragedy. It is crammed with the finest art works in the world, now able to be enjoyed by the general public without much difficulty. Anyone from Jew to Buddhist is free to visit the Vatican to enjoy the masterworks. Whether you believe they're worthy of God or not makes little difference. Among its collection are works that ennoble humanity as much as they sought to ennoble God. Artisans from Michelangelo to da Vinci, Bernini, and thousands of unnamed master workers have contributed not just to the individual works, but to the building itself. It is truly incomparable in the world and a testament to the best that humankind is capable of imagining and creating in a state of genius. To behold the Sistine Chapel does as much to cause marvel of the man who created it as it was intended to glorify God. You may not be moved to become a Christian just by experiencing the Vatican, but you will be astonished by the beauty of which we are capable of creating and expressing. Art of this caliber is invaluable not for its monetary cost, but for understanding and celebrating the human experience. It's a true proof of, "we are more than the sum of our parts."
Never, ever, discount the value of art because it teaches us so much about who we are. Great art unites us in awe and teaches us new ways of thinking; of understanding who we are and who we were. We learn new processes, and free ourselves from convention by doing so. We learn through the abstract, new and valuable things about the mundane. In that experience we are enlightened and educated because we are confronted by the imaginations of others in unique ways which, sometimes, change the course of history in their brilliance. The Vatican and its treasures is no less invaluable than the British Museum, the Louvre, the Prado, the Metropolitan, or any other great world repository of art.
The Vatican is what it is and, on the whole, the popes have been good curators save for occasionally nailing fig leaves on nudes or (shudder) having drapery painted over the genitals of Michelangelo's nudes (removed since the latest restoration --yaay!). You need not be Catholic to understand or appreciate the glories of the art, and maybe the curators are hypocritical by today's standards, but remember that very little changes quickly in the Catholic church and since its foundation, it has always been the policy for the Vatican to be as close to Augustine's City of God as possible. For us, that's a more abstract concept than the vast majority of history has understood it to be, right or wrong.
A word about the Egyptian obelisk. That was actually placed where it was by Emperor Caligula, someone definitely NOT a Christian. The site of St. Peter's is where the old Circus Maximus was located and the obelisk was a decoration in the Circus. It was not dragged there by any pope. Rather than move it, they just left it.