Similar to what @Mordechai wrote, Rabbi Avraham Orenstein wrote in his book "Hanesi'ut Beyisrael" (The Princehood in Israel), pg. 15:
"בתקופה הראשונה, בזמן שסדרי בית הדין הגדול היו קיימים, היתה האפשרות המעשית לחברי הסנהדרין, לבחור בכל פעם נשיא חדש מתוכם. לא כן היה המצב בתקופה השניה, בשעה שסדרי בית הדין הגדול נתבטלו, והיה בלתי אפשרי לטפל בכל פעם בבחירת נשיאים, ובהתחשב כי הלל היה מזרע דוד שעליו נאמר: "לא יסור שבט מיהודה ומחוקק מבין רגליו" (בראשית מ"ט י'), גמרו אמר, כי הנשיאות תתנחל מעתה אצל הלל, לו ולזרעו אחריו לדורותם."
Translation: "In the first era (of there being a nasi), while the Great Beit Din ran in orderly fashion, it was possible for the members of the Sanhedrin to choose a new nasi every time from among them. Not so during the second era, when the system of the Great Beit Din was canceled (by the Romans), and it became impossible to organize every time the choosing of a new nasi1, and taking into consideration the fact that Hillel was of the seed of David, about whom it was said: "The scepter shall not depart from Judah, Nor the ruler’s staff from between his feet" (Beresheet 49:10), it was decided that the princehood from now on would rest with Hillel and his descendants for generations."
Therefore, the halacha seems to have been שעת הדחק, they were in a legal/religious bind and that was the agreed upon solution.
1 I think he means that to assemble all the members of the Sanhedrin for whatever purpose would have arouse Roman suspicions that this was an attempted uprising.