I agree that there were two major reasons why nickel was popular. In the black powder days, nickel was more resistant to corrosion from use, plus many owners were unaware of the requirements to keep their guns very clean after every outing. My grandfather would only clean his 22 squirrel rifle when it became hard to see the riflings in the barrel or when the action would no longer close. Of course, by the time I was old enough to shoot it, there was no rifling left. Also, more people carried their guns in the late 1800s and they saw some pretty tough weather conditions, and nickel offered a more durable finish than blue. There was also an element of bling appeal among gun owners, especially in the late 1800s. By the time it was widely accepted that gun oil was a good thing and smokeless powder was the only ammo available, nickel sales slowed.
From 1900 on, there was no price difference between nickel and blue for S&W. While looking for finish price differences, I looked at the price lists fro 1900 to the start of WWII and found it interesting to see the price changes. I picked standard 38 M&P revolvers and came up with the following:
1900 - $14
1906 - $15
1923 - $31
1931 - $32
1936 - $33
1941 - $24
All those price lists state these prices for either nickel or blue.