The differences in credit risk between Moody's Baa2 versus Baa3 versus Ba1 versus Ba2 are all comparable. People would pay much less attention to agency ratings had the regulators not forced them to. In 1936, the OCC prohibited the N.A. banks to own "speculative investment securities," as determined by "recognized rating manuals"   (Banking Act of 1935, Section II). In 1975 the SEC rebranded credit rating agencies to "NRSROs", creating a cartel. In 1989, this rule was extended to more institutions, who suddenly were forced to sell a lot of HY bonds at fire sale prices.

Goverment bureaucrats just needed some arbitrary boundary between IG and HY, so they decided to draw the line here. I'll try to illustrate this concept with Google Streets:

https://www.google.com/maps/@40.7822931,-73.7161662,3a,75y,113.75h,94.82t/data=!3m6!1e1!3m4!1sVxOjS9g44SugJ7YKm6IhTQ!2e0!7i16384!8i8192

This is Northern Boulevard (aka Route NY-25A). The structures on the left and on the right are in Queens Country - New York City. The structure is the middle is Nassau County - the hamlet of Manhasset. There is no logical reason why the county line should be here, but this how it got drawn back when this was all farmland.