I have a book that covers the history of Miller & Offy engines and one of the main reasons was that many of these engines were supercharged and the tech available of designing head gaskets that could hold the boost was no where near what we can do today. So the easy method was to eliminate the gasket and cast the head and cylinders as one piece.
And as for why we don't still build it this way? We do! Look at most air cooled small aircraft piston engines. They come with the cylinder and head as one piece.
I can't think of one rotary air craft engine that wasn't/isn't built this way.
