Just like with the 1967 Eldorado, the Toronado was FWD for no other reason than to see if it could be done and to help buyers show off ("Oh, your Thunderbird is RWD? That's cute"). Ford almost had the 1961 Thunderbird be FWD for the same reason, but couldn't get it to be reliable enough. JKgo is correct: the inherent advantages that it brought (better handling in the poor traction conditions, marginally more interior space) were practically irrelevant compared to the talking points that the marketing department could put on the sales brochure. It wasn't until the 1980 redesign of the E-Body cars (Riviera, Eldorado, Toronado) that any lip service towards FWD being legitimately beneficial came into play.
Remember, this was a car that took up a bigger footprint than a long wheelbase S-Class (and was pretty much the same size as the second generation Riviera, which was still RWD) but had less usable interior space than a 1980s Civic wagon; in a market segment where a guy bought one and then drove it everywhere with two people at most in the car. The Oldsmobile engineering staff had been tinkering with the idea of FWD car since the late 1950s (essentially because they thought it was pretty cool, but also because they thought they could replicate the Corvair's packaging benefits but avoid the Corvair's handling problems), and the E-Body platform the Riviera sat on was the only car with a high enough profit margin to absorb the extra engineering costs to actually sell it.
