Channel 1 started out in 1941 as just like any other channel--licensed for metropolitan coverage using 5 KW visual transmitter power, 2.5 kW aural transmitter power, and whatever ERP you could get out of an elevated, multi-bay antenna. WNBT in New York was the only station ever licensed and operated on the original Channel 1 between 1941 and 1946 for commercial operation. The first Channel 1 (50-56 mHz) was abolished in 1946 as part of the FCC's reorganization of the VHF band. WNBT was toldd it would not get the OK to operate on the new 44-50 mHz Channel 1 and was pushed up to 66-72 mHz (channel 3 pre-war, Channel 4 on the postwar allocation table). The rest of the few existiing stations and CPs issued by the spring of 1946 were also moved around...WCBS-TV was moved from the old Channel 2 (60-66 mHz, the postwar Channel 3) to the new one at 54-60 mHz. WPTZ in Philadelphia also was re-assigned...from the old Channel 3 to the new one which had been Channel 2. Confused? GE's WRGB in the Capital District changed channels without moving or doing a thing to their transmitter and antenna. It had been assigned to the old Channel 3, and its new assignment was Channel 4--the same 66-72 mHz they'd been using, which meant all they had to do was change their ID slides. (They'd have to move up to Channel 6 in 1953, where they remain today, though they got to more than double their power.)
The new Channel 1 would be reserved for limited range community stations allowed only 1/5 of the transmitter power of their metropolitan brethren, although community stations could also be squeezed in on other channels if room could be found . Some community stations--the ancestors of today's LPTV--WERE licensed on other channels in smaller markets and actually made it to air, although they would all later be upgraded to full power on different VHF channels in the early 1950s. Channel 1 after the war? A couple stations were granted CPs, but never got on the air. KARO in Bakersfield, CA never made it to air at all. WSBE in South Bend, Indiana didn't get on the air as Channel 1, but eventually, in 1953, it WAS built by the South Bend Tribune as a pioneer full power UHF and continues on the air as WSBT-TV, Channel 22.
As far as all the ABC O&Os being put on Channel 7 in 1948 and 1949, when they first went on the air? ABC's technical brass believed the low band channels were going to go away and all television moved up into the upper VHF and UHF realms to provide space for higher resolution color signals. Didn't happen that way, of course...RCA made color work within a standard NTSC channel, and later generations of engineers would get a still higher resolution digital signal to work within the same space almost six decades later. But Channel 7 has proven a good all-purpose channel over the years, and it so continues today.
And what was wrong with Channel 1, aside from the fact that the authorities decided to re-allocate it for emergency communications in the 1952 re-drawing of the TV allocation table? Not a lot, really...occasional skip or tropospheric ducting could cause distant stations to interfere with each other, but that is just as true of Channels 2-6, and even infrequently on Channel 7 and up. It would happen just often enough to worry the FCC and make them conclude that TV should be moved off the under-50 mHz territory just as FM broadcasting had been during the late 1940s.