I think Vin Diesel was a good choice.
Let’s not forget that much of what an actor does comes in the form of how he says his lines. Most of communication occurs outside of just words. Much of that is in motions and gestures, but much of it is also in intonation, timing, stress, volume, etc. Plus, Vin Diesel has a unique sounding voice that fits the role of a large, powerful tree being.
Some reinforcing points for thought are these. One of the shortcomings of email is you simply receive the words someone says, and lose much of the full meaning coming from the sender. Another example close to home for me is when you talk to your pet. They don’t understand language for the most part, but they understand a lot based on how you speak it.
As far as an A-list actor goes, the handicap of only speaking several actual words means that your full acting talent has to come to bear in order to pull it off. Maybe an A-lister is what is needed here. By the way, Groot also says “We are Groot”.
Remember that Vin Diesel was the voice actor for the Iron Giant in The Iron Giant (1999), and it was a great role which his unique voice suited, so we know that Vin Diesel is not just an A List actor that happens to be voice acting for Groot, but that he is actually a good voice actor with the resume to back it up.
As for hiring any A lister actor to voice act in your movie, any opportunity for a studio to put a famous actor's name on a poster (ensuring more ticket sales) is one they will always take. Starpower translates directly to more successful box office sales, and Vin Diesel, especially around the time of Guardians of the Galaxy releasing, was immensely popular.
Side-note: he is also a prolific voice actor for video games, including the Chronicles of Riddick franchise games based on his character Richard B. Riddick from the film Pitch Black (2000), and a Grand Theft Auto style game called Wheelman. He seems to love video games, tabletop games and other aspects of geek culture, which makes him an adequate fit for an obscure comic book movie.
A-list actors are supposed to be "bankable stars", so it makes sense that directors/producers would want one in their movie.
But Vin Diesel wasn't the first to audition for the role, as revealed by James Gunn:
All of the 'I am Groots' that were earlier voices didn't sound very good at all, they sounded like shit. It just didn't really work.
Then Vin came in and in one day, laid down all these 'I am Groot' tracks, and he's a perfectionist. He made me explain to him with every 'I am Groot,' exactly what he was saying …
Then Vin would sit there and he would do it and he would it again and again and again, and his voice is so rich and so beautiful and he really opened up and was this character. It was amazing when we first put that voice in there how much the character changed and how much he influenced the character.
And Vin Diesel had this to say:
I was lucky that I had a director [James Gunn] who was willing to indulge me. I told him:
‘We know that Groot is really saying any number of things when he says that line and most people are oblivious to the nuances of his speech because of his hardened larynx’.
All you hear is the growl but he could be saying any number of things and we know that Rocket Raccoon understands him. He doesn’t always tell everybody he understands Groot and he plays on that, but he does understand him.
So I asked James:
‘Can you give me a basic idea of what he’s trying to say when he’s saying “I am Groot”?’
James had a 50-page document waiting for me when I came in to do the voice. On the left-hand side of the page it said ‘I am Groot’ and on the right-hand side it had whatever the line really was if you could understand this floral colossus. That was the beginning of trying to go deep into a character like this.
In many ways it was the most challenging thing to ask an actor to do. The thespian in me responded to the challenge of not being able to use facial expressions, physicality or a Golum-like vocabulary.
For big budget films and from a business perspective big name stars are a good way to help ensure a good return on investment.
Also consider that Vin Diesel has a fairly well defined persona which audiences are familiar with and for a character like Groot especially this can be an effective and efficient way to give a character a bit more depth and relatability.
Similarly it is not trivial to create a convincing CGI charter or puppet from scratch and having a real actor to work with who is capable of capturing the personality of that character can help a lot. Consider also the physical acting work that Andy Serkis did for Gollum which undoubtedly helped to sell the character on screen in a way that a random person acting as a motion capture placeholder probably would not have managed in part through interaction with actors, animators etc that you never see on screen.
In addition to the excellent answer by Oliver_C:
In theater, there is a very famous scene in the play "Cyrano De Bergerac" in which the titular character repeats a single word over and over (twenty times or so?). It's considered a real challenge for an actor to perform this scene well -- because you have to find some way of making each repetition something different that adds to the scene.
There's a similar scene in a more recent play called "Peter and the Starcatcher" in which a character repeats the phrase "ohmigod" dozens of times, rapid fire. Done well it's hysterically funny. Done poorly, the joke would have fallen completely flat.
Or another play, "The Foreigner", in which one character tells a story in a gibberish made-up language. The ENTIRE scene only makes any sense (and again, can be quite funny) if there person playing the role does it well. With a lesser actor you're basically just watching someone go "blah blah blah" for five minutes and it would be terribly unfunny.
Having the single line "I am Groot" was NOT a simple thing to do well. I actually give Vin Diesel a lot of credit for the performance he gave. He managed to make a character with one line (okay... two lines) compelling and entertaining. He earned his paycheck.
As far as I understand it - Diesel was in talks to star in Inhumans; but when Marvel saw the fan reaction to him joining the MCU, they didn't want to wait that long; and started looking for a role he could do sooner: