The whole key is that Keith did not have a Vax at the Math department (they had an 11/70 with max memory) and wanted all of the cool programs that were being created on the Vax. Remember, VM is automatic overlays. So first with the kernel, and then later with user code, larger and larger programs were enabled and many of the programs for the Vax migrated to the PDP-11, as people ran out of address space (IIRC: one the first user programs that needed to use overlays was ex/vi. Again, as I recall the original wnj version by then was such a mess, getting a new/cleaner code base was a large impetus for Keith to start writing nvi).
Anyway, many smaller programs 'just worked' and the original fmt(1) command was pretty simple. As Doug so wisely observed: "It's hard to imagine how this command could stray from classic Unix simplicity and intelligibility, but Gnu pulled it off."