It seems likely that the Hutts came from a planet far more well suited to their physiology (as did many other species). In the case of the Hutts, it was likely the very fact that Tatooine is so inhospitable that made it desirable to them. The planet is sparsely populated, has an underdeveloped government system, and clearly has no real standing army. As such, it would be like a very underdeveloped nation in an inhospitable part of our planet. Why might a very wealthy family decide to live there? Because in that small pond, they immediately become a very big fish.
Real world example: Certain mafia families decided to set up operations in what was, at the time, the middle of nowhere in a desert backwater called Las Vegas. They invested huge amounts of money into building casinos thanks to the (at the time) unusual legal gambling laws there. Why would they do this? Because the smaller, less developed state made them more influential over the local government than they would be in a very developed place like New York.
I see the Hutts coming to Tatooine very much in that vein. It wasn't because the planet was hospitable to them, but because it was undeveloped and they could easily co-opt the levers of power. It was undeveloped because it was inhospitable, so in a way, they went there BECAUSE it was so harsh for them to live on.