While the SE 44mm is only 1mm smaller than the Series 7 45mm, the actual display is larger. The SE 44mm has 977 sq mm display, while the Series 7 has a 1143 sq mm display.
Granted, it still may be a marketing thing, as the 41mm Series 7 has a 904 sq mm display, which is 73 sq mm smaller than the SE 44mm.
Then again, it may be feature parity. Users would expect the same features from all watches of the same model, regardless of screen size. The SE 40mm’s 759 sq mm display would be too small for the keyboard, even though the 44mm would be large enough.
In short, the smaller SE would be too small for the keyboard, and Apple wanting feature parity across both sizes wouldn’t want to restrict the feature to the larger size. Instead, they opted to lock it to the higher end models.
Side note, I have no personal experience with the keyboard on Apple Watch, but I would assume it’d be a miserable typing experience. Just use dictation, swipe to type, or smart replies. They’re much more efficient than trying to tap the tiny keys (unless you have an Ultra, as that 49mm display is just massive).