I think the bigger engine sizes were just to stay competitive with the other 2 manufactures! Cubic inches sold cars in those days. If Chevy didn't call the Z/28 a Z/28 and put the trim, stripes, 4 speed and 15" rallies I bet they would not have sold many of them. Too small a motor and not much advertised HP. It was the cubic inch wars in those days. I also think if I remember correctly

hearing that a bigger cubic inch motor was easier to control emissions.