Was Isla Nublar always volcanic, or was it a retcon?

An early draft of the script for the first film contains a line by Hammond describing the island explicitly as an extinct volcano (though this line is missing from the final version of the script):

Isla Nublar. Actually an extinct volcano, though there's still volcanic steam in places... as you can see, ocean currents make it permanently covered in mist.

The above line is a paraphrasing of a quote from the original book, which frequently¹ mentions the island's volcanic activity. In fact, the island's name itself derives from this:

Isla Nublar, Hammond explained, was not a true island. Rather, it was a seamount, a volcanic upthrusting of rock from the ocean floor. "It's volcanic origins can be seen all over the island," Hammond said. "There are steam vents in many places, and the ground is often hot underfoot. Because of this, and also because of prevailing currents, Isla Nublar lies in a foggy area."

Why would InGen build a park on an island that has a volcano?

We may assume this is because the creators of the park hypothesized a diverse and volcanic environment would be more 'natural' for the animals, or conducive to the preservation of multiple varied species:

It was during the early Triassic period that Procompsognathus had lived... The air was denser. The land was warmer. There were hundreds of active volcanoes. And it was in this environment that Procompsognathus lived.

... when Grant looked at this landscape, he saw... another, very different world, which had vanished eighty million years ago... At that time, there were thin clouds in the sky overhead, darkened by the smoke of nearby volcanoes. The atmosphere was denser, richer in carbon dioxide.

Costa Rica had a remarkable diversity of biological habitats: seacoasts on both the Atlantic and the Pacific; four separate mountain ranges, including twelve-thousand-foot peaks and active volcanoes; rain forests, cloud forests, temperate zones, swampy marshes, and arid deserts. Such ecological diversity sustained an astonishing diversity of plant and animal life. Costa Rica had three times as many species of birds as all of North America. More than a thousand species of orchids. More than five thousand species of insects.

Sources

^{1. Jurassic Park, Michael Crichton}

^{Along the side of the road, clouds of volcanic steam misted rainbows in the bright quartz lights... Land Cruisers moving through fields of steam... The southern end of the island had more volcanic activity than the north.}

^{He smelled the sulfur fumes of the volcanic steam... Already he could smell the sulfur. And up ahead he saw the rising steam of the volcanic fields.
The ground was hot, Gennaro thought, as he walked forward. It was actually hot. And here and there mud bubbled and spat up from the ground. And the reeking, sulfurous steam hissed in great shoulder-high plumes. He felt as if he were walking through hell... They all walked forward, among the bubbling steam vents.}

^{"The raptors are localized in the southern area, down where the volcanic steam fields are. Maybe they like the warmth."... It looked more and more as if Ellie had been correct: the nest was in the southern volcanic fields.}

The Pacific side of Costa Rica sits directly over a subduction zone where the Cocos plate is moving under the North American plate - very similar to how the Juan de Fuca plate produced the Cascade Range, most notably for recent history - Mt. St. Helens. It would be unbelievable if Isla Nublar, Isla Sorna, and the rest of the "Five Deaths" were not volcanic, especially given that the real-world seabed off Costa Rica has a number of volcanic seamounts which could produce islands similar to those described in the books or protrayed in the movies. As pointed out above, people build on volcanoes all the time.

More relevant as to the "why" build there if Hammond is so rich - this is described in the original Crighton novel - Costa Rica was willing to sell Hammond an Island not subject to any regulatory authority. The reasons why Hammond chose to build on Isla Nublar is that any volcanoes appeared dormant/extinct, and no one was going to tell him he couldn't build the park or clone dinosaurs there - or monitor what he was doing.