The explanation I've heard and believe is that pits as fighting dogs were bred to be easily handled by their human owners who needed to manage them in order to compete them.
People aggressive and dog aggressive are two different things. Terriers are all naturally dog aggressive. At conformation shows they stand terriers face to face to see them respond aggressively as part of the standard. I just saw on TV this Jack Russell competition chasing bait down a hole and they were all muzzled. Some would stop mid chase and attack the dog next to it muzzle and all. It was disgusting. Some sport.
The difference between today and a century ago is that today I would guess the macho criminal element breeds pits for people aggression. Pits were never meant as guard dogs and have no judgement for it. Unlike GS...
No, both are dominance, and the only difference is where you are in the pecking order.
There is a difference between 'aggression' and 'prey drive' toward small moving targets... but aggression toward people ~usually~ involves clashes over dominance and territory. Dog aggressive or people aggressive are just shades of grey, not different behaviors.