In a recent interview, Super Mario Galaxy director Yoshiaki Koizumi explained that they opted to have planetoid levels in the game in order to reduce the complexity of camera controls.
"After working on titles such as Super Mario Sunshine I began to wonder if it was possible to continue to implement the themes of surprise and ease of play with the increasing complexity of camera controls", said Koizumi. "Until I could find a solution I decided to close off the idea of any future Mario games."
But then he had the idea of having planetoid level structures.
"We didn't do it just because they were visually novel," Kozumi confirmed.
"No matter how large you make a playing field, players will reach the end and have to turn around. And the camera will have to turn around, too, increasing the chance the player will get disorientated. The best thing about spherical worlds is the unity of connected surface, which lets you run around forever."
"It's hard to get lost and players don't have to control the camera! We gained more than just a spherical playfield - we removed the need to move the camera and solved our problem of too-difficult controls."