Club riders of the period generally rode fixed wheel bikes so could manage without the wide range of gears many require today. To use an SA hub properly in many people's opinion, you gear it so that the 2nd gear direct drive or "normal" ratio is the same as your preferred fixed gear ratio. You then have a climbing gear lower down and a high "overdrive" gear for downhills or when you have the wind at your back. That configuration works very well in practice (I have a bike like that) and would provide the majority of cyclists with all the gears they ever need for normal riding.
The AW hub has quite wide gaps between the gears, perfect for commuting or touring, less so for high speed riding as the wide gaps in the gear range make it difficult to fine tune cadence. The close ratio hub allowed a small step up or down from the normal ratio, head wind on a flat road, drop into first and maintain the cadence with a small drop in speed, the AW hub with the big gap would also mean a notable drop in speed. It is the same reason as to why high performance or race cars will always have close ratio gear boxes with carefully chosen final drive ratio - it's all about staying in the efficient power band of the rider or engine.
With only 1 or 3 gears to play with, knowledgeable "serious" riders would have changed the sprocket before a long ride to have a gear to suit the planned route.
It's also worth remembering that the concept of high cadence riding didn't start with Lance Armstrong. Read cycle manuals from the 20s or 30s and you will see references to "twiddling" to make most efficient use of power. Club racers of the 30s - 50s would have trained on perhaps a 58" or 60" fixed gear over the winter to improve their cadence. I think the general belief was that you were not race fit unless you could average at least 18mph over a 100 mile ride on a 63" fixed gear.
It's true that old bikes had ridiculously high gearing from the factory, but only because it was cheaper to build. People who knew what they were doing fitted a big sprocket to suit their needs while everyone else struggled on the best they could.
