Jay,
Pure speculation on my part but I doubt Rootes had much to do with the choice. I am guessing that Chrysler had the most influence on the size chosen. I think somebody told the engineers to develop an engine that had the most displacement for the least money to develop and build. I am not totally sure but I am thinking that these engines' basic design dates back to a flat head side valve design which was modified to allow the use of an OHV setup ( MOD 1 ). When the Alpine was developed, the "new" alloy head was put in service ( MOD 2 ). The alloy design works but it is a compromised design in many ways > poor sealing, marginal performance, and probably a better choice of alloy could be found today.
When Chrysler bought into Rootes, I would say that a return on investment was most important. The American market was the single biggest market for Rootes and none of the then current Rootes models were going to be able to pass the upcoming American vehicle safety standards. New vehicle models were required before development of a sorely needed new design engine. In America we all know bigger is better but how do you get the most engine for the least cost as a temporary solution? Enter the 1725 ( MOD 3 ). By not changing the bore, the head, head gasket, and pistons remain the same or as off the shelf items. That means that for practical purposes the block casting cores were changed to include five mains and their required machining, a new oil pump and sump design to match the new wider block ( was that to clear the new longer stroke crank ?), a new set of cam cores to match the oil pump drive, new cranks, and new rods were developed to build both a 1500 and 1725 engine with the same tooling and basic parts. I think if Chrysler could have made the stroke longer and the engine stay reliable it would have been done.
I am sure all this is over simplified.