It appears that the jury is out on the "original intent" for the collocation of Michelangelo's David. In the 1501 contract between Michelangelo and the Opera del Duomo there is no mention of its destination. On one hand there is the block of marble that had been there since 1464 when the Opera had commissioned Agostino di Duccio to carve a "prophet," perhaps a "David" as Tolnay contends. Originally, the statue was to be situated on an exterior column of one of the buttresses.
However, the Opera itself did not appear to be concerned with its final destination- or at least did not voice their opinion until 1504. By 1504 the city government called a commission of the city artists and artisans to debate on where the statue should be situated. The dominant political opinion saw David as the new icon of Florentine power to replace Donatella's "Judith and Holofernes" after having fallen in disgrace over the loss of Pisa. By then the statue was either to replace Donatella's work at the entrance of Palazzo Vecchio or be situated in the Palace courtyard, the latter opinion shared by Leonardo da Vinci and Sangallo.
The likelihood that Michelangelo's David was to be placed on an exterior column of the Duomo was supported by the opinion of Francesco di Domenico who argued that the statue had been made for the Duomo. His argument though may have been made on a matter of principal rather than on technical considerations. After all, the Christ was the seed of the Flower of Mary, a direct descendant of David. But since di Domenico was also in charge of the Hall of the Great Council he may have had a conflict of interest. His opinion contrasted with that of the Signori of the Opera del Duomo who, perhaps influenced by Michelangelo, argued for Piazza della Signoria.
It is interesting that none of the great artists on the commission, Leonardo of all or even Botticelli, were concerned with the optical corrections Michelangelo may have incorporated in his work had the statue been effectively made to be put on a high column at the Duomo. One may surmise that the optical effects of its hypothetical destination at the Duomo was not considerably different from its final location in Piazza della Signoria. Perhaps Michelangelo all along had allowed for a certain margin of optical corrections since its final destination was by contract at the discretion of the Signori of the Opera del Duomo. Or perhaps Michelangelo had secretly nurtured the idea all along- and promoted it- that his David would represent Florentine power rather than just be one of many statues along the side and back of a cathedral. Only AutoCad can tell.
In conclusion, seeing that none of his extraordinary contemporaries were particularly concerned with David's proportions being out of place in front of Palazzo Vecchio, one may once again ask the fairly trivial question, why are David's hands and head so big? I'm sure there are several concurring reasons, as should be, with one of the greatest works of art ever made.