I think they took advantage of the smaller scale to incorporate greater realism, higher standards if you like.
Once the train set would fit on an ordinary dining table, there was no need to go to the relatively extreme measures adopted to allow 0 Scale to be used in relatively small spaces.
I believe 9" radius, 18" diamater, has been used in 0 gauge in the early days for the most basic outfits, and some of this track has survived to prove it.
Imagine an HO set employng 9" diameter!