Stretched tires is just another Euro thing. Same reason they put weird color wheels on the cars, rust/argyle/checkerboard hoods, uselessly negative camber, too low to drive (in this area), etc. Just a particular style some people are into. I don’t even think the euro-heads even know why they do the stuff they do half the time, other than to make their cars more unique (and often weirder) than the other cars.
I think the only functional purpose the stretched tires may serve is if the car is lowered, the tires fit inside the fenderwell, so they dont rub the fender opening.