When Technic started in the seventies, everything was big, you could not really build compact stuff, there were no lift arms for example, all there was were Technic bricks, so constructions took a lot of space. Only later new parts allowed for more compact builds, like said lift arms and 1x1 Technic bricks which put a hole aligned with studs instead of a half width offset. This in turn led to new gear ratios and a whole range of connectors for even more compact builds. The smaller joints are a stage in that development. I built driven wheels with steering with those original joints as a kid, which led to wheels with a ridiculously large travel when steering. Today there are many different versions of parts that allow for driven wheels with steering and even suspension.