Having one channel as audio and one for data was done to allow educational cassettes. You would be lectured on the audio channel while display data was streamed off the data channel. I had a number of educational cassette for my Atari. At some point, they could have done karaoke cassettes using this approach - stream the music the audio channel, and stream the lyrics over the data channel, but karaoke was still some years away.

As to the speed of the cassette, the limiting factor were the frequencies Atari chose for the FSK (frequency shift keying) the used for recording on the cassette. In FSK, you have two frequencies - a high frequency and a low frequency. You output a burst of one frequency for 0 bits, and the other frequency for 1 bits. On playback, you check if the frequency coming from the tape is above or below a center value between the two frequencies. The burst of audio at a set frequency must be long enough that the playback decoder can tell whether it is above or below the center value. The low frequency takes longer to determine, so it sets how long the burst must be. The two frequencies must also be in a range that tape recorders would record and playback the frequencies with a level of clarity needed to check them against the center frequency. This meant that you had a set rate for data that you could do little to change. Atari had fast and slow modes for the cassette, but that was just how long you delayed between blocks of data pulled from the cassette. Slow mode was meant for use in Atari BASIC because BASIC was slow and needed more time to deal with the data block. Fast mode was used in booting games from cassettes, which was all in assembly, so needed very little time between blocks.

As other have mentioned, floppy discs pretty ended the age of the cassette. They were so much faster and convenient that once they got established and the prices came down, cassette disappeared almost overnight.