The P4 at that time came as a 4 cylinder or 6 cylinder. The 4 cylinder was significantly slower (less power from the heavy LR engine) but only 6% or so cheaper, so it didn't sell well. Both these models were produced for only 3 years, then upgraded to the 95/110 models, the lesser of which produced 25% more power than the LR engine. But even these only stayed in production for a further 2 years. Times were changing fast, and the weight compromise that was acceptable in the LR was not tolerable in a road car expected to be capable of 100mph+ (the 4 cylinder "80" version only reached 80mph or so).
I still don't see any evidence for the 2.25L engine being especially good for a 4WD, only that its weight provided a disadvantage in a road car, and it was tuned for torque at lower rpms. But I have no doubt that it was a good move for the company, it saved the cost of developing and manufacturing a diesel and petrol engine seperately.

