Cisco has stated that they are very hesitant to change default settings in IOS, and with good reason -- when upgrading IOS people don't want to have to worry about what default settings have changed that may break their network.
But I don't know why proxy arp was made a default originally. It may have been to make the routers "just work" as often as possible. But proxy arp is an ugly hack that allows broken networks to function and should therefore generally be avoided, so it's a good setting to disable.
