Why it is special is subjective. For me it is the fact that they can easily be built to perform and they are not the same ol Che vy Ford or Mopar that I see everywhere.
They are as reliable as any of the popular, mainstream engines, regardless of the compression ratio.
I cannot answer your question regarding a Y-Block or 302, only offer some things to think about.
From what I understand, Twin I Beam trucks are similar enough that nearly an engine that came in one can be swapped to another easily. That means that any pre fuel injection engine from 1965 on should be easy to swap, making the 302 a better choice in that regard. I have no first hand experience with this and as I've become wiser, I've learned that phrases like "direct swap" and "bolts right in" are not usually accurate and usually require at least some degree of modification. So my advice is do not expect it to simply drop in.
On the subject of the 302, they were made for a long time and more of them are bad than are good. If your plan is to swap a good used one, then the best for the job would be a late 80s FI motor, which you can convert to carb. That way, you get a roller cam which helps a lot with the torque, which is a plus for towing. I think you would be upset with a smog era 302 - even the worst 292, the one that came in the 1964 trucks, is leaps and bounds better than those. Some of the 302s from the late 60s and early 70s will probably be alright but you'll probably find it difficult to find a genuine one in good working order. Any of the performance versions would not work.
If you're planning to build the 302, then it doesn't matter so much. You just pick parts that will achieve your goal.
I think for the actual job of towing, you will like the 292 more because they tend to have quite a strong low end, compared to other engines of similar displacement. The down side is that it will cost more to build and it will probably cost more to swap, so it's going to get you twice on the finance portion. As far as the capability, they were used in much larger truck, doing much more heavy duty jobs, so it will tow a utility trailer and 4 wheeler with ease.
Another point is fuel mileage. I'm sure you've noticed that in every forum, a post about fuel mileage shows up, "what kind of mpg do you get?" something like that. Every time I have seen one of those, Y-Blocks tend to edge out the 302 swaps. This is purely anecdotal and a number of factors will play into fuel mileage, but it is interesting to see.
They run fine on today's gasoline. You will want to have hardened exhaust seats installed, but that is pretty standard when an older engine is rebuilt.
Lawrenceville, GA