The four-plus year marker was chosen because it's consistent with other programs under the Income Tax Act that deal with new housing. The first home savings account, for example, and the homebuyers' plan have a similar time test. This also limits the amount of time the CRA has to look back, in terms of how long it is since somebody's owned a home.
To your question as to whether it ought to be shorter, again, we're striving for consistency with the other definitions.