Actually, when the LP was introduced 23 minutes was considered the maximum length for a side. (This is why Decca often dropped songs from the LP editions of some of their cast albums that were originally done as sets of 78-rpm discs.) This chaneged with technology in teh mid 1950s when variable groove cutting allowed a single LP to hold 30 minutes per side. The technique was pioneered by Columbia Masterworks to allow longer Classical pieces to be recorded on single Lp's.
Standard pop records had a general groove size designed to accommodate the loudest music. Even if the music was quiet, the standard cut was used. Columbia found that by using variable grooves quieter passages would take up less groove space. (If you find older Columbia inner sleeves from teh1 950s there ias a more detailed explanation.) The one side-effect was that the grooves that carried louder passages took on a slightly lighter sheen on the record side, as opposed to early LP's which had a consistent shading all across the side. Very soon most of the other companies started using this technology. The general concern was that as the none-arm moved towards the label there would be inner groove distortion. (Listen to any pressings of the Boston Symphony recording of Ravel's Bolero..it always gets fuzzy in the final - loudest - passage which is near the label.)
RCA Red Seal fit 66 minutes of music onto 1 Lp for their 1977 revival cast album of THE KING AND I and their LP edition of SUNDAY IN THE PARK WITH GEORGE fit 35 minutes of music onto each LP side. (It meant limiting the volume a bit, but Sondheim readily agreed saying "Volume is not what this show is about.")
AS for INNER CITY, it was the choice of the album producer at the time. Remember too that album sides were generally designed t have a flow of material from track to track (which is one reason why some cast albums adjusted the song line-ups: You didn't want two big ballads back-to-back or too many songs in a row featuring the same performer. Sometimes too, album producers would remove songs they considered "clunkers." (On FOLLIES Dick Jones did not want "One More Kiss" to be included on the LP. It was recorded because Sondheim wanted it done, but it wasn't added until the first CD reissue restored it.)
INNER CITY being an off-Broadway show with a limited market probably meant the label did not want to record every song, knowing they would not get released. The Lp seemed to be forever in cut-out bins. It's very hard to find a copy without one of the corners notched!
Cast albums are NOT "soundtracks."
Live theatre does not use a "soundtrack." If it did, it wouldn't be live theatre!
I host a weekly one-hour radio program featuring cast album selections as well as songs by cabaret, jazz and theatre artists. The program, FRONT ROW CENTRE is heard Sundays 9 to 10 am and also Saturdays from 8 to 9 am (eastern times) on www.proudfm.com