That's at least physically half-plausible, but it would be a terrible reason if true. 3.5 in. format hard drives can't be shrunk any, and their costs are correspondingly high, but they still sell - newer versions of NVMe even provide support for them. Same for LTO tape cartridges. Perhaps they expected other persistent-memory technologies to ultimately do better, but we haven't really seen this.

Worth noting though that Optane is also power-hungry for writes compared to NAND. Even when it was current, people noticed this. It's a blocker for many otherwise-plausible use cases, especially re: modern large-scale AI where power is a key consideration.