I think its basis was for a commercial operator of single engined aircraft could maintain its teaching requiments without having full blown FI's on its books.
It would be rather difficult for them to keep a FI valid and also there wasn't much need for them to teach fresh meat.
So they banged out a rating which allowed everything a commercial operator would require to keep things ticking along. A bit like on bigger things a TRI can do OPC's and a line trainer can do line checks etc. So a CRI could teach at night and under instrument conditions.
Nobody had cross checked it with the FI rating. It turned out that actually apart from teaching PPL's the CRI was actually all that most pilots would need access to. It costs next to nothing to get with minimal days training and is very easy to keep valid.
To be honest I think it was sprung on the UK CAA if they had known about it and what it was valid to teach I really don't think it would be as it is today.