Is there any particular reason for using diameter as the input parameter for G-code on CNC machine?
This is simply because the final product will be measured by diameter. Most clients or engineering drawings will specify diameters of shafts and any round objects using diameter. For example you will receive an order to make a 30mm shaft, that is the diameter.
But you can change the settings on your CNC to what you are comfortable with, i know some people who prefer using Radius instead i.e. R15 followed with tolerance.