I'm pretty sure the reason has to do with pixel density and marketing. Increasing pixel density is expensive so there's a limit to what manufactueres can do. They can either sell you a 4:3 at 20" or a 16:9 at 22" with the same pixel density.
1600 x 1200 = 1,920,000 pixels crammed into 16 x 12 = 192 square inches (20") so you get 10000 pixels per square inch.
With widescreen you get: 1920 x 1080 = 2,073,600 within a (22") a lot harder to calculate but should be roughly 19.18 x 10.79 = 206.95 square inches so you get 10019 pixels per square inch.
As such if both cost the same to manufacture since larger panels can sell for higher prices as most consumers care about the number of inches more than the resolution it just makes more sense to sell 22" or larger panels. Also it decreases the number of pixel warranty returns since the wider the screen the more chance that dead pixels are found in an area to the side and not in the central viewing area.
So basically it's much like why TN panels have dominated over IPS and VA. It's cheaper to produce and it's easier to market since response time is an easy number to throw around.