OK, but the original decision to leave them in BR Residuary back at the BR breakup was I think something Railtrack lobbied for.
I think that DfT were looking for an easy single organisation to transfer them to, and the Highways Agency was just one of theirs, even though almost all the roads they span etc are not HA roads but local authority. However transferring them to a large string of local authorities, especially as these are looked after by a different Whitehall department, was likely a complication too far.
I've no knowledge of the goings on back then, but that would make sense.
And Highways England is funded in control periods, with a 'statement of funds available' and overseen by the Office of Rail and Road, so it has a sort of governance similarity.
That came later. The ORR took on regulation of Highways England in April 2015.