How does this make sense, any sense? Any sense at all??

FWIW the kef ls50s sound is similar to me to the other Stereophile Class A small monitors they replaced, Triangle Titus, so at least they are consistent in this case with what they consider to sound good.
I do think however that though similar the KEFs are noticeably better at least with my gear.  The Triangles however are much better suited for use with tube amps. 

What acoustic property of the Ls 50 did stereophile exaggerate?

One may always have their preferences but Ls50 is definitely high end when used properly.

First time I heard them I was very underwhelmed. The amp had insufficient current delivery and the room was too big.

Moved them into a smaller room with a beefy high current amp and then they came alive.

Two years later I bought a pair and tossed in the sub. Listening to them as I type.
I’ve heard a lot of high end systems and this setup is in the same league.

The thing to realize is A speaker must do exponentially more work as the frequency drops. Way way way more work must be done to deliver extended flat bass in a larger room. It makes sense then that it will cost way more for a speaker to do a top notch job in a larger room.
It’s really that simple. Most good quality speakers can do an adequate job otherwise, personal preferences aside.
The caveats are keep the room small for best sound on a budget and powered subwoofers are your friends.

The other thing to remember is technology continues to improve allowing smaller speakers to do way more than in the past, similar to how computer technology continues to get faster and better and in smaller packages. So expect to pay a premium for truly the best speaker technology and design in a smaller package. Joseph audio comes to mind there.

The kef ls50 offers a lot of that in a small and affordable package but is still best suited to smaller rooms alone and the amp needed to drive them to their max might cost something of a premium. 

Hopefully, this helps.

I didn’t say any amp and sub with ls50 will be top notch in a small to moderate sized room.

I said a beefy amp ie high current delivery and of course good quality and sub that is also good quality.

Then of course the user must get the sub Adjusted properly to blend with the mains. 
That gets you well up there.....

KEF ls50 + beefy amp to drive them + powered sub can match most anything you would ever put in that same  room. 

But the sub will have to carry more of the bottom end as room size increases. 

So room size is the main determining factor for how big and likely expensive a speaker need be to perform at the highest level full range. 

If Full range not of concern then things are also much easier. 

The stereophile class ratings are only useful to a certain extent. It’s always reasonable to question what you are really getting with products that cost way more than others.