They'd pulse whether they were AC or DC though - the "pulsers" were the old "bottle" dynamos which were simple two pole devices. These simply have a very variable output over their phase, whether they're rectified or not. As they're spun quickly, this isn't a problem.
Hub dynamos rotate more slowly so they need more poles to give a usably stable output. They're still AC though because they're just multi-pole devices with a single winding, not polyphase as car or larger alternators are. As it's unlikely that bikes would ever use polyphase AC lighting (three phases and three conductors) then the few truly polyphase bike dynamos around are DC output and use diodes to rectify their output.
The reason for them bothering to generate DC is so that you can have a capacitor backup to keep the lights on when stopped at junctions. These started to be quite sophisticated a few years ago, but they've now been overtaken by LED lights that can allow a year's commuting on a single battery change.