Remember when writable CDs first came out? You could write a whopping 650MB of data on a small disc. This allowed more than an hour of music to be stored on a disc in the simple CD-Audio format, even without compressing the audio. Alas, our data storage requirements have continued to grow, especially for video: DV-formatted video from a digital camcorder (at a data rate of 25 Mbps) requires around 11GB of storage per hour of video, and MPEG video compressed to 6 Mbps still requires 2.3GB per hour.
One of the design requirements for the DVD format, therefore, was to have enough capacity to hold at least a two-hour movie. This requirement led to the standard DVD size of 4.7GB.