Yes, wheel base is not a contemporary measure to define the segment called "compact" (or any other segment), but it apparently
was in the 1950s, before more contemporary measures. A Nash executive apparently devised the term circa 1950, according to
this website, which cites Heon Stevenson (2008)
American Automobile Advertising, 1930-1980: An Illustrated History., p. 214. My 1998 Civic is 103." The Ford Model A was of similar size. The VW Beetle was smaller but not radically smaller at about 95," so the history of it was of a little interest. I like freebeard's theory above that it has something to do with seating and legroom. I also suspect that point can help explain 6 seater carriages in the 19th Century that nonetheless seem to have the wheel base of a Beetle or a Civic: people were smaller/thinner and seating took less space because it was just planks of lumber, mostly. That's interesting, a little. I still wonder if it was partly about vehicle stability in the 19th century. Vehicle width would be part of stability. I guess there might be a craft history linkage, too. Builders of coachmakers would have been a lot of the early builders of automobile bodies. Their habits of thinking about what made an appropriate sized and marketable carriage would probably affect early autos.