The typical cycling shorts are the end product of a long (100 years plus) evolution of function. Most gear that is successful is so because it is functional first. Jerseys are supremely functional, and shorts likewise. A snug fit prevents flapping at speed, and bunching up at contact points. They are long enough to prevent thigh-chafing against the saddle. Any number of tests have shown that spandex shorts improve leg circulation and thus give a slight boost to aerobic efficiency.
Racers are the supreme functionality freaks; if it's not working, they won't use it.