Genki Playstation interview with Yoshiki Okamoto, overseer of development for all Capcom games.
Biohazard Dash was thought of between the development of BH1 and BH2. The starting point of the scenario is that there exists a room underneath the Tyrant’s incubation room. The story of the game unfolds three years after the events of BH1. The characters are different and this time infected plants have attacked the inhabitants of Raccoon City. The victims have changed partially into plants. It is as if everyone is slowly transforming into some plant.
The developers wanted to use the same areas (that were in BH1) but with cracks, spiders’ webs, etc added in order to indicate the flow of the time, as well as some new rooms.
But this would have taken too much time to be developed and the release of BH2 would have been pushed back, so the idea of Biohazard Dash was abandoned.