The reason that the new carriages are shorter than the old ones (well than some of the old ones actually as I understand that TPEs 170 carriages are the same length as 350 carriages) - albeit that they are formed in four as opposed to three carriage trains so there is a capacity gain - was pragmatism which meant an order could be placed quickly by piggy-backing on an extant option (hence the involvement of LM). I understand that the 350s are, in any event, an interim measure for certain routes currently covered by the TPE franchise and that the rolling stock to be used on those routes in the longer-term has yet to be determined. Such an approach, while perhaps sub-optimal, did result in new rolling stock appearing sooner rather than later wih TPE.
The 350/3 and /4 orders utilised the outstanding options negotiated for the previous LM 350/2 order of 37 units.
It may not have been possible to order more vehicles (Siemens wanted to get on with the Thameslink order).
The split between LM and TPE was down to the DfT based on the business cases put up by the TOCs.
The fact that class 350 vehicles are shorter than 170s/185s is an accident.
SWT ordered the first Desiros (450s) as 4x20m units to suit their London suburban network.
But the final batch of these SWT units was diverted by the Strategic Rail Authority to Silverlink/Central to work out of Euston/Birmingham on the WCML, reconfigured for AC and classified as 350s.
LM then ordered more 350s, and the joint LM/TP order is more of the same.
Left to their own devices, Silverlink/Central/LM and TP would have ordered 23m vehicles for their better seat/cost ratio.