I believe 32-bit was chosen partially due to implementation efficiency reasons. It makes sense because you can allocate a 4GB mapping, so there is no need for a second software virtual memory layer. Also perhaps they internally require tagged pointers, which are much cheaper, especially if aligned, if the pointer is only 32 bits

WASM has a (pointer + i32) address mode, and the effective address is 33 bits. So WASM implementations use 8GB mappings ...