The main reason is that setting VED based on the CO2 output of a car per kilometre distorts demand and encourages the purchasing of more fuel efficient vehicles, even if you don't drive very many miles. Something to bear in mind is that maybe ~15% of the cars on the road are with their first owner - the rest are used, and being driven over a different distance per annum than the intention when they were bought new.
There is, however, a finite supply of used cars, exactly equal to the supply of new cars minus a bit - if you don't have fuel efficient and environmentally friendly new cars, then you don't get environmentally friendly used cars. If you don't have a VED then people who drive very small distances will be happier buying a heavier polluting vehicle; manufacturers of cheap utility cars could have them output 260g/km, and because the typical buyer only drives 2000 miles per year, create a cheaper ownership proposition than a technically advanced, more economical, but slightly more expensive competitor. The £1000 first year VED rate discourages that. It's an extreme example, but that's the principle. If you then don't have these technically advanced low emissions cars being bought new, then you don't have them in the parc to be driven used, potentially over much larger distances.
In reality it's only a small influencer, as fuel taxes reduce the appeal of uneconomical used cars for high mileage drivers, but I'm sure it does have a measured affect, though probably not as much as BIK in the UK.
