Hip techniques are performed by lowering your center of gravity below your opponent's. Throws require less effort the lower you are; is there a point where it'd take more effort if you went lower?
If you do an ass-to-ankles air squat, you'll be unable to execute a number of hip throws (koshiguruma, ukigoshi, ogoshi...) on any but the shortest opponents. Tsurikomigoshi might still work but it's hard.
In addition to being out of position for grips, most athletes struggle to apply significant force from the absolute bottom position of a really, really deep squat. I've seen this work fine with morote seoinage, since if one sets up the throw excellently then the squat is merely there to get out of the way and not to lift on the way up, but for hip throws generally it helps to lift strongly.
It isn't simply a matter of getting lower, and it a matter of creating a pivot point, and applying leverage. If your center is too distant from theirs it will become harder to execute a throw.
Imagine a seesaw with two points set out from the center instead of a single one.
========= vs ========== ^ ^ ^
The distance from you to the pivot is shorter, making it harder to move. And the amount of weight you have to life would be larger. You want one center that gives you the advantage.