I think I read or saw somewhere that RCA would take a round screen with the color dots printed on them and would use a microscope to line up the shadow mask over them. Since they were round they could twist the shadow mask around to get it perfectly aligned. I guess at that time the machinery just wasn't precise enough to make a rectangular mask and screen without allowing for a little wiggle room. I think I also read that RCA had a very high reject rate as it was, maybe close to 50% early on.

I always figured the round picture was a compromise since they could have made it rectangular using a bigger CRT, but that would have made the sets much more expensive and heavier.

There could be some other technical reason too that I'm sure others know more about.

I have noticed watching some older color videotape programs from the late 50's and early 60's that at times the pictures have a lot of color fringing in the corners. Of course the engineers at the time couldn't have known that since their screens were round too. And, even if they did know it, they wouldn't have cared since nobody at home would see it.