pianos have had different sized keys throughout history, the recent standardization came about in the early/mid 20th century, and the size that we see today was actually driven mostly by piano companies competing to see who could produce the piano with the loudest, fullest sound.

what you may not know about pianos is that the "action", the keys-and-hammers bit, is a totally separate piece that can be removed in about 3 minutes. Most of the 7/8 keyboards manufactured today are actually just smaller actions that can be swapped into normal sized grands.