In the steam era, railroads ordered different locomotives for different parts of their systems, and the B&A tended, in this regard, to be the most distinctive (maybe most aoutonomous?) part of the NYC system. This distinctiveness was reduced if not totally suppressed in the diesel era, but B&A did get some diesel "specialties" that weren't ordered for the "Water level Route": GP-7 with dynamic brakes, for instance.
So perhaps ordering some 375hp/driving axle passenger diesels for the B&A was a continuation of the older practice? (Weren't the Baldwin 1500 hp A1A-A1A cab units also used on the B&A?
As for later developments... I can see that the E-8 would have been better than the E-7 in the mountains. (The E-8 had the newer traction motors used on "F5"/F7GP-7, which had significantly higher capacity than the earlier model: it was almost up to the first version of the GE 752, used on Alco's FA/FB-1, though not in the same league with the later 752 subtype used on the FA/FB-2.(*))
But perhaps the main reason for assigning E-8 to B&A passenger runs was that with declining total passenger work, the NYC had too many E-units by the late 1950s? (That's speculation on my part.)
(*) For references, look for an old string, "PA-1 Traction Motors," on the Alco forum, where a number of historical questions about GE traction motors got discussed. For my comparison of the 1949 EMD traction motor with the 1946 version of the GE 752, my main source of information was the continuous tractive effort figures for FA-1, FA-2, F-3 and F-7 locomotives in Alvin Stauffer's "Pennsy Power II." The FA-1, with the early model of 752 and geared for 65mph, had about the same continuous tractive effort as a Pennsy "EH-15": an F3 with special (50mph) low-speed gearing, and was still a bit better, i.i.r.c., than an F7: the FA-2, with the next iteration of the 752 traction motor design, showed a major improvement.