How did they decide on these sizes?

I think it's just because in the olde-tymey English units, there's nothing smaller than an inch, so you have to subdivide to get the precision needed. Hence x * 2

^{-n}. In SI units, there's really no practical reason to use subdivisions of a millimeter, so x * 10

^{n} is all that's needed and wrench sizes can be whole numbers.