SweetsList, Maybe I just missed it, but didn't see any comment on the obvious fact that a larger flange diameter results in more widely spaced spoke holes, which reduces stress in the flange. It would also allow the use of more spokes, if that was an objective. If you were inventing the wheel, the question of flange diameter would be resolved in terms of spoke hole spacing. This would be a function of the number and diameter of the holes, the amount of force to be expected at each hole, and the strength of the flange material.
I would think early designers realized that aluminum hubs would be good, but that the flanges would have to be larger to keep the stress around the spoke holes at acceptable levels. Early aluminum hubs were not forged, were they? I can see how cyclists would have come to associate high flanges with greater strength and durability, even after better material made high flanges unnecessary.
John Hurley, Ignorant but happy to speculate
Austin, Texas USA