I don't think anything (glock, polymer, gov contracts, etc.) 'drove' Smith to drop their steel line except profitability. Steel/alloy guns still sell, and sell very well. (In the current market everything is selling well.) Smith chose to adjust their business model towards the plastic market and away from the steel and alloy guns. Had they kept the lines going I'm sure they could move every all-metal gun they made, just the profit would be lower.

To be mass market competitive every manufacturer 'must' have a poly-striker gun that they can put in the display window of gun shops or online; the steel guns will sell as well but with a lower profit margin.

Hand made and hand fitted are relics for any mass market industry. Modern "product realization" focuses on just-in-time logistics, modularity, remove-and-replace, and disposable.