There's a big difference when choosing technologies for a home computer versus a safety-critical system that will run for decades. Seems reasonable they would've chosen a proven, if slightly outdated, tech over a newer one that had less data to back up its long-term reliability.

And of course we can get into the discussion of cost: floppies are way cheaper than hard drives, especially for the presumably-small amounts of data that are needed for such a control system. A 500MB hard drive was probably overkill.

I am of course speculating, but I don't know why we should assume that the engineers working on the project originally made a silly decision. They almost certainly weighed the available options to deliver the project within the defined constraints of the system.