I like S gauge a lot because it's wide enough for a figure on a small-to-medium base to stand between the tracks, just as a person might anywhere! Figures are wider than HO track and that just looks so wrong to me! Also the scale of the railroad ties seems to look much better at S. And of course the trains themselves are about as close to 1:56th as you can get among "common" scales.
But the thing is, wargaming is diverse and there are so many different sources of track and different preferences. Some might go S, OO, HO, even O, and others might even have plastic track from holiday sets or MDF kits or whatever have you. Separately mounded wheels with variable spacers allows the same model to work for (and be sold to!) as many different gamers as possible! Which makes the whole venture much more feasible from a business point of view.