[v8volvo]

Although it may seem counterintuitive that the gassers, with less torque and a more peaky power band, got a taller rear end ratio than the diesels, there are usability factors that help make sense of it. Keep in mind that the right choice for final drive ratio needs to not just optimize cruising speed but also take rev limit and the upper end of the power curve into account. The diesel makes its power in the midrange while the gasser engines need to use higher revs, BUT, the diesel's maximum speed is around 1000 rpm lower than the gas engines' (~5000 vs 6000), and in stock form the diesel's power falls off well before that 5000 rpm limit.

So, taking a hypothetical example, if the gasser and the diesel had identical gearing and you drove them both up a steep mountain grade, at a certain point, both cars would need to downshift to maintain speed. If you were trying to keep the speed at, say, 65 mph, you would probably need to drop down two gears in the transmission. But, in the diesel, third gear might be inaccessible because of the rev limit, while in the gas car, it could reach the lower gear due to the wider rev range. As a result, the diesel car (in stock form) gets a driveability benefit from using a slightly shorter rear end ratio and a faster cruising RPM, since it has less RPM flexibility and fewer ratio options at any given speed.

One final relevant note to keep in mind -- gas engines benefit much more than diesels do from keeping cruising RPM low and engine load relatively high, in terms of fuel efficiency, because of the reduction in throttling losses. Diesel engines, without a throttle, typically do not see a significant impact on MPG from incremental reductions in cruising RPM. Using the tallest viable gearing to lower cruising RPM and increase economy in the gas cars may have been an engineering priority. For the diesels where the efficiency benefit of taller gearing was minimal or none, the performance benefit of a shorter axle ratio might have been more important.