OK, I gave in and went and pulled my box of Thane Tostig stuff out of storage. It is Hangbeffor's pet earwigs and the sprite King and his torturer that only have 1 hit (called energy level in the rules), the sprites have 3, 4 or 6 depending on which particular model it is. I think the huge number of hits for the heroes is to ensure they can actually survive enough turns to get to the climax of the scenario.
Given subsequent game developments and expectations now it seems crazy, but what other solution was there then? Pre 1977 D&D was using a multi dice roll system to achieve the same thing, a huge store of hit points for the heroes (this was before the use of speciality dice).
It would be possible to alter it, but there are so few rules anyway (about 3 sides of A5 paper) changing anything would pretty much qualify as a complete re-write, at which point is it worth it?