Originally, there was no limit.

Then, after bitcoin had been around for a while, there was a discussion about possible attacks if a miner were to create excessively large blocks.

1 MB was arbitrarily chosen as something that was big enough to last a while, yet small enough to avoid significant issues if many blocks were created that size. The was done with the concept that it could always be increased later when necessary.  Clearly there wasn't enough thought put into how difficult it might be to gain agreement on that increase.