From that I'm wondering if Olympus were following similar logic to Pentax at the time.

Pentax made a 55mm f1.8 and then a 50mm f1.7 as the "standard" lens with a 50mm f1.4 as the more expensive model. The slightly slower lenses were designed for ultimate sharpness and an ability to tolerate optical abuse - cheap teleconverters, filters, extension tubes, etc.

The f1.4 was designed for speed. It's slightly softer wide open but sharpens when stopped down. The suggestion is that it was intended for photojournalists rather than the serious amateur market. My experience is that at f1.4 the DOF is a knife-edge and yes, it's not particularly sharp. But as I said earlier, in the real world a soft image is better than no image if you can't use a slower shutter speed or faster film.

I have examples of all three and use them more-or-less interchangeably, my only consideration is how much risk there is of damage. If it's likely to get covered in spray or might get stolen I'll use the "disposable" one of the 50/1.7s (so called as I've already had it apart once to clean fungus out and I'm not worried about taking it apart again if it got, say, a drink spilled over it). Other than that it depends on the camera. The 55mm tends to stay on the KX it came with, the 50/1.4 migrates. One of my MXs and one of my MEs tend to hang onto the 50/1.7s they came with.