Quick answer
Those targets are common because they are small enough to pass through many systems but large enough to preserve decent readability. That makes them useful for contracts, resumes, scanned forms, certificates, and administrative documents.
A good starting point is 1MB or 2MB if the website or email system allows it, then go lower only when necessary. Chasing the smallest possible PDF often hurts readability faster than people expect.
What usually works best
Use the same unit shown by the destination. A 1MB binary target equals 1024KB, while a 2MB target equals 2048KB. Matching the stated unit helps avoid conversion and rounding mistakes.
If the file is still too large, the PDF controls help you choose the tradeoff. The smaller-file profile pushes harder. The sharper-pages profile protects readability more. Render scale and quality cap give you extra control when one-click compression is not enough.
If it still fails
This matters in real life. People are not trying to win a compression contest. They are trying to submit, share, or archive a document without the upload system rejecting it. That is the standard the tool should serve.