Hi Ratso...
Simply put, they needed a better side valve racer than the WR to keep up with the Limeys (Norton Inter and BSA Gold Star mostly, so no sloths...) so rather than design a 500 OHV to compete with the Limeys, they were allowed since the 1933 "Class C" new AMA racing rules to race 750sv against 500ohv... So, the street K design and the racer KR design were done at once and in parallel cause, according to these Class C rules, the KR racer had to have a street equivalent, the K...
Some see that as an unfair advantage, but lets face it, wouldn't you be p*ssed off, riding a more than OK Limey, being beaten day in day out until 1969 by a flaming side valve???
(then, in 1970, the Limeys thought they could at last win a lot... Bummed... The iron then alloy 750 XR soon saw to that with even more spectacular results... so, not a fluke this KR business!!!)
Then the sv K/KH morphed quietly into ohv Sportsters in 1957, you can still see their bottom end heritage that was still with us during the Evo Sportster years.
Patrick