2 in 1 and 3 in 2 are because of shortage of rooms. I also lived in Vindhyachal along with a roommate in my first year. It was a single room with two bed along the two walls and one table in middle. There was no place to even put a chair.
The number of students increased drastically because of introduction of OBC quota. It happened sometime around 2005-6. They increased the seats by ~27% in all branches, hence the requirement of new hostels.