I'm asking based off of the distribution of welsh speakers according to this heat map I found on Wikipedia, based on data from the 2011 census.
The Landsker Line (Welsh: Ffin Ieithyddol Sir Benfro [Fin yay-thuh-thol Sear Ben-vraw]) was a boundary whose position has frequently changed through the centuries, depending on whether Wales was at peace or at war. Such a boundary exists in the first place because Southern Pembrokeshire and the Gower Peninsula were such an appealing place for invading peoples to settle down in, but difficult for them to further expand.
The first records of settlement indicate the Déisi people from Ireland integrated with the Brythonic Celts in Demetae between 350 and 400, whose name may have influenced Dyfed's name (Dove-ed, a Petty Kingdom in what is now Pembrokeshire, Ceredigion, and Carmarthenshire). Between the 9th and 10th centuries, the area experienced extensive Norse raids although it isn't clear if they settled. Nevertheless, various places in the region have names influenced by Norse. Around the same time, battles were stated to have occured with Saxons and other people of unspecified origin, but their language began to take hold. The writer and translator John Trevisa wrote the following on the subject in 1387: "Both the Flemynges that woneth in the west side of Wales. Nabbeth y left here strange speech, and speketh Saxon lych y now."
The greatest influence was after the Norman conquest of England, in which King Henry I relocated Flemish immigrants from England into neighbouring Wales as an attempt to colonise the country. The similarities between Flemish and Old English may have contributed in English's later dominance in the area. Several accounts exist of this relocation; "King Henry removed all the Flemings in England into Wales. England contained so many of these Flemings...that the country was overburthened with them. Wherefore with the two-fold intent of clearing the land, and repressing the brutal audacity of the foe, he settled them with all their property and goods in Ros, a Welsh province" wrote the historian William of Malmesbury. Caradoc of Llancarfan wrote around 1135: "In the year 1108 the rage of the sea did overflow and drowne a great part of the lowe countrie of Flanders in such sort that the inhabitants were driven to seek themselves other dwelling places, who came to King Henrie and desired him to give them some void place to remain in, who being verie liberall of that which was not his owne, gave them the land of Ros in Dyvet, or West Wales, where Pembroke, Tenby and Haverford are now built, and where they remaine to this daie, as may well be perceived by their speach and condition farre differing from the rest of the countrie". And according to Brut y Tywysogion (Bryt uh Toe-is-og-yon), King Henry: "Sent to his castellans and officers, and the Frenchmen and Welsh who were well affected to him, with a command to receive the Flemings and give them means of subsistence, under condition that they should take arms when required by the king and those faithful to him. And so it was. And those strangers had Rhos and Penfro in Dyved, and settled there as loyal men to the king. And he placed English among them to teach them the English language, and they are now English, and the plague of Dyved and South Wales on account of their deceit and lies, in which they exceeded any settlers in any part of the Island of Britain".
There was a third influx of Flemish people, sent by Henry II in 1155 after the Norman invasion of Wales was repelled. Furthermore, following Edward I's complete conquering of Wales in 1283, the Welsh people and its language were frequently subjugated over the following centuries, which further made English dominant in Pembrokeshire. The linguistic divide was so sharp, the author George Owen on Henllys claimed in 1603 "you shall find in one parish a pathway parting the Welsh and English, and the one side speak all English, the other all Welsh, and differing in tilling and in measuring of their land, and divers other matters". Even in 1972, Brian John commented that the Landsker Line "is a cultural feature of surprising tenacity; it is quite as discernible, and only a little less strong, than the divide of four centuries ago."
The 'Little England Beyond Wales' is not as distinct as it once was, due to a decline and later nationwide resurgence in the Welsh language, but it still exists as a separate identity to Welsh for those south of the Landsker Line.
In sum, the boundary mainly exists due to Flemish migration, sent there by Henry I and II to establish a loyalist, English-speaking colony in Wales.