Because NT's PBX systems already owned a building's twisted pair plant (for voice), it made sense to use the same wiring for data as well.
LANStar was originally to be a component of NT's PTE (Packet Transport Equipment) product, which was a sort of minicomputer arrangement with dumb (VT220) terminals on the desktop and the CPUs in an intelligent rack (the PTE) in the PBX room (alongside the PBX).
The PTE was to have several basic office automation apps: word processing, database, etc.
Given the investment already sunk into the product, NT attempted to repackage the PTE as a small (dorm-room-refrigerator sized) cabinet (the PTE-S, 'S' for 'small') containing only LANStar controllers and supporting up to 112 nodes.
[1] LANStar had cards for the PC/XT, PC/AT and MacII and supported NetBIOS, Banyan, Novell, and AppleTalk.