When it came out, the 757 was a significantly larger and more powerful plane than the 737. It was not a direct replacement, it was a new model in a class above

When it came out, the 757 was a significantly larger and more powerful plane than the 737. It was not a direct replacement, it was a new model in a class above what the 737 at that time was. Then, after the Boeing 757 was already in the skies, Boeing kept making the 737 bigger and started impinging on 757 territory, which had previously been separate.