It was largely formed from the unfortunate horrific injuries that people were sustaining in the more recent conflicts. At the start of the scheme, which was very loosely based on the criminal injuries compensation scheme, that type of injury wasn't really catered to, so you could have the possibility of a veteran with three or more serious injuries being awarded compensation for only two of them.
Quite clearly when you look at a full compensation scheme, yes, those with a higher tariff have a guaranteed income for life, but to cater to their ongoing care and housing needs, particularly if they're not able to work at all, that's why the higher figure is required.