Diesel engines of the 30's had been seen as reliable, but lacking a power to weight ratio steamturbines combined with high presure boilers could deleiver. As warships were moslty to be seen as fast enough to stay out of trouble, dielsepropulsion was dropped, once more powerful engines were developped. Diesels were primarily used on the sort of vessels needing endurance, such as submarines and merhcantships. Cruisers were rarely fitted with them, except the Deutschland class, though mostly for political reasons, rather than anything else.
The Deutschland class cruiser was mostly a political compromise, to show the German ingenuity in shipdesign, producing a single purpose type of heavy cruiser, intended solely to hunt merchant shipping at the open ocean, a task simillar to late 19th century French armored cruisers. More normal cruisers were fitted with more powerful engines to allow them to use hunt down raiders, as well as run away from stronger ships, if they needed to do so. The speed also was needed to combat fast destroyers and torpedoboats, as well as scouting for the fleet, all jobs the Deutschland class cruiser was not planned to do, being too slow for normal fleet jobs and possessing too slow rate of fire main guns, to be useful in a typical cruiser role.
Historically the Deutschland class was the end of a line of studies to produce a new warship within the limmitations demanded by the Treaty of Versailles. The first proposals were for slow coastdefense ship types, with little range and slow speed. Later more different dersings were drawn up, mostly of large cruisers, intended to hunt shipping in then open ocean, resulting in the Deutschland class eventually, though some designs were of more ballanced heavy cruiser standard.