There is no data justification
The justification is purely political, so stop looking at anything related to data in this one.
It was a dry run on "cleaning the country from undesirables" using a part of the population which is known to not have resources to put up a good fight. Most of the people affected were in the income bracket we associate with poverty and had no money to afford "lawyering up" for a fight with the Home Office.
The dry run was mostly successful too. They can now proceed to the real thing post-BrExit.
If you think I am joking ask any Eu cittizen who has successfully obtained dual nationality or right to remain before 2011 to do a subject request for his original paperwork from the Home Office. It has been destroyed deliberately the same was as Windrush papers. I understood that by pure chance when having a spat(*) with them regarding the son's passport last year.
Home Office Droid: "Oh, we no longer keep any original paperwork, it has all been shredded".
(*)Spat was on an unrelated matter - they did not like the fact that I applied for his passport instead of his mother. I ended up having to threaten them with both a discrimination lawsuit and asking my MP to officially question them on discriminatory policies in the commons.