The Washington, despite being a North Carolina class in shape, is intended as an EBB which sits between the Iowa and the Montana in terms of stats and leveling capacity. So it is intentionally better than the Iowa.
Previously, the Missouri filled this gap. Visually this would make more sense as the Missouri is an Iowa class, so you would have the Iowa and then the stronger EBB Iowa. However, a new tier of EBBs was added that were lvl 99 and the USN was not provided a new ship, so the Missouri was upgraded to be the lvl 99 EBB. The Washington took the place the Missouri used to hold as the USNs EBB5 (the ships that goes between the BB4 and BB5).