Why are Large Form Factor (LFF) disks still fairly prevalent?
Solution 1:
Use 2.5" disks for enterprise SAS workloads and 3.5" for bulk and high-capacity storage.
You've answered your own question. Buy the right type of server for your anticipated workload. If you need high performance drives, optimize for that. If you need a lot of storage, then focus on that.
Small-form-factor (2.5") disks are available in the following capacities:
72GB, 146GB, 300GB, 450GB, 600GB, 900GB, 1200GB in enterprise disks (10k/15k) and 500GB and 1TB for (5400/7200 RPM) drives.
Large-form-factor (3.5") disks were/are available in
146GB, 300GB, 450GB, 600GB capacities for 10k/15k RPM enterprise disks
and
500GB, 1TB, 2TB, 3TB, 4TB, 6TB in nearline/midline bulk-storage media (7200 RPM)
e.g. Buying a 600GB SAS 3.5" 15k RPM enterprise disk would be a mistake today, as would purchasing a 1TB SATA 2.5" 7.2k RPM drive. Both of those are well outside of the sweet spot and ideal application for their respective form factors.
A note about HP's ProLiant servers: Large-form-factor 3.5" disks are NOT featured prominently in the product line. You may see LFF disks in product photos and marketing material, but all of the product SKUs that you'll likely see in distribution are going to be SFF. Only a couple of low-end models of the DL380 Gen9, for instance, are spec'd with 3.5" disks.
Solution 2:
It is a cost/performance vs capacity question.
2.5" HDD, at the same RPM/rotational delay, have a performance advantage versus their taller brother by the virtue of the smaller platter area. This in turn permit lower seek time (because the head had to travel a physically shorter distance). At the same time, this means that total platter area (read: capacity) is at about 50% maximum relative to 3.5" disks.
For example, even modern capacity-oriented (10K RPM) 2.5 HDDs are limited to below 2 TB (Hitachi Ultrastar C10K1800 is 1.8 TB, but many other drivers are significantly smaller, at capacity between 900 GB - 1.2 TB). Performance (15K RPM) 2.5 HDDs are even smaller, at capacity below 1 TB. For all intent and purpose these 2.5 HDDs are challenged by 2.5 SSDs, with much faster performance and capacity exceeding the 1 TB mark (with some drive, as the Intel DC3700 / 750 series, hitting the same 1.8 TB max).
At the same time 3.5 HDDs, after stagnating for years at the 2 TB mark, are now available at capacity of up 6 TB (both 5.4K and 7.2K RPM) and even 8 TB (Hitachi He8 and Seagate Archive serie, even if the latter is not recommended in the general usage scenarios).
This leads to many vendors proposing "convertible" chassis, where a basic design can be ordered with 2.5" bays or 3.5" ones, with a ratio of (often) 2X more bays for the 2.5" version. Let's say that our server of choice can both have 24 2.5" bays or 12 3.5" ones. If you build for performance, at the maximum 1.8 TB capacity for 2.5" drive you can have about 43.2 TB total capacity. With more affordable 1.2 TB disks, you are at 28.8 TB. Doing the same math with 3.5" HDDs, with 8 TB models you are at 96 TB, and with more affordable 6 TB ones you are at 72 TB. As you can see, 3.5" HDDs are good for 2X/3X increased capacity/density, at the cost of slower performance.
This is the exact reason why cloud providers (which often don't care much about performance, but are all about capacity) are going with 6/8 TB 3.5" HDDs. On the other side, virtualization and database workloads strongly prefers high-speed, lower capacity 2.5" HDDs (but really excels with 2.5" SSDs).