Please correct me if I am wrong about any of the following. I was young and shooting a Ruger 22 when all of this was happening.

I think you are almost certainly correct, but didn't the Model 27 lose popularity because of the Python and then S&W gave up and created the 686 to directly compete with the Python? I've read stories about s&w owners creating Frankensteins to emulate the Python. So when the 686 came out, what else were you going to compare it to?

You often want to build a competitive product cheaper but have the public believe it has everything that its competitor has. To the public, the 686 was an acceptable alternative, and it was less expensive. Most didn't want to pay for the extra work Colt put into the Python. Some couldn't even see it. A retired Sheriff I know told me that they carried either a Python or a 686 and he by far preferred the 686...but some of his friends preferred the Python. It was all about functionality.