Except it was not. 120 in the forms of 6x4.5, 6x6, 6x7, 6x9, 6x12, 6x17, 6x24. As well as 4x5 and 8x10 sheet film sizes.
It was just that the 35mm stills cameras (in particular the rangefinder camera), were smaller, and more versatile than medium format. In the time when medium format cameras, were mostly twin reflex cameras, with fixed lenses, the Leica rangefinder had interchangeable lenses, packaged in half the size.
Remember 135 film dominated photography for over 50 years, it managed to become the most widely used of the commonly seen standards, and do not forget that 135 film is still commonly used. These reasons mean that overlap is critically important, so as a result you see most camera manufacturers providing good compatibility between film and digital.
It's only recently that camera manufacturers have explored the possibilities of other format for professionals, Pentax now have the 645D and the Leica S2, the S2 in particular is a big departure from the 35mm base for Leica.
So to conclude, photographers are the customer here. The customer prefers progressive upgrade, as sudden departures from the existing standard is harmful for both the photographer/business as well as the manufacturer.