With great power comes great editability.

I wonder what was the issue with arrow keys. Were there keyboards that lacked them?

Yep, but it then stayed that way because arrow keys are distant and require you to leave the home row, while hjkl are on the home row.

Vim is all about ergonomic touch-typing.

the other answer is also correct but you are correct as well! The machine vim was developed on didn't have arrow keys but used hjkl for arrows: http://www.catonmat.net/blog/why-vim-uses-hjkl-as-arrow-keys...