Why does PAL DV use 4:2:0?

The best explanation I can come up with why PAL DV went with 4:2:0 is that both PAL and SECAM show reduced vertical color resolution and better horizontal color resolution compared to NTSC, so 4:2:0 seemed a closer match to the native display systems in PAL/SECAM countries. As PAL DV was intended as a consumer format for off-air recording or camcorder acquisition, multigeneration losses in 4:2:0 were considered a less important factor than the optimization of first-generation performance. PAL DVCAM also used 4:2:0.

When Panasonic developed DVCPRO, they opted for 4:1:1 even in PAL versions, specifically for the multigeneration advantage. Thus PAL DVCPRO decks have the pleasure and responsibility of handling both 4:1:1 DVCPRO playback and 4:2:0 DV playback; they have extra hardware to digitally resample the 4:2:0 signal and come up with a decently synthesized 4:1:1. Sometimes there is a reason for the higher prices that the poor Europeans are saddled with when it comes time to purchase gear...