Right, this is my best educated guess (I studied Mechanical Engineering at one of the 'Great Universities' mentioned in Blackadder IV, but it didn't begin with an 'O' or a 'C'). On a beam being bent, the stresses are concentrated on the outer surfaces of the beam in the plane of being bent. That's how I beams work - the material in the middle isn't really needed so it's omitted, the central web is mainly there to link the two outer surfaces together. That's why Pace could machine away the material on the sides - it wasn't really needed to maintain the structural integrity of the frame. A fork operates mainly in compression, working differently to the beams in the frame. A circular section would work better here as it minimises the volume (and hence weight) of material used (look up Euler's formula, if you REALLY want to know about this / are having trouble sleeping), a square section would use more material. It's also worth bearing in mind that these frames were designed before 3D CAD modelling and Finite Element Analysis (a method of analysing the stresses in an object on a computer, I used it as part of my final year project to reduce the weight of industrial seed presses for a company by about a third) were widely available, certainly to a small company. All this being said, I think we're ignoring coolness - which is not really quantifiable in engineering terms. The Pace frame was designed as their big product, the forks were available as an aftermarket upgrade to everyone. The Pace frame is undeniably a work of beauty (if anyone's bored of theirs, send it my way by the way), and let's face it that counts for a hell of a lot.
Feel free to take anything I've said with a hefty pinch of salt though - I now work in the food industry, got sick of working for engineering companies that never made any money! If only we made stuff in this country nowadays, including Pace.