My opinion is they did use a better cam in 390GTs and CJs. That cam had split duration with lots of exhaust lobe compared to intake, plenty of advertised duration. Until about the 390GT and J code Mustangs, Ford just either went small, or bigger single pattern. Seems like someone at Ford started figuring out that the imbalance of the heads and exhaust needed split.
As far as why not a bigger cam with that setup? I think springs, power brakes, warranty, heavy parts, etc, maybe even looking forward to the Muscle Parts sales for those who wanted more. Not to mention, cold start, the wife driving the CJ to the store while hubby worked, start of some initial emissions requirements leading up to 68, all would have met a larger customer base than making it choppy
That being said, at about 50 degrees overlap, they could have added 4-5 degrees, advanced it by about the same amount, and still behaved well down low and drove power up by a margin.