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It's possible S&W decided that stainless production capacity would be better utilized with a center fire caliber. At the time all the stainless guns were very hard to find. The Model 63 did not come along until later in the 70's and they were not hard to find. My LGS had a 63 for a while and I eventually bought it for my girlfriend.That market survey was done over 50 years ago. These were only a few stainless steel handguns available back then and they were marketed towards law enforcement. Most folks preferred blue steel back then.
I'm still shocked they destroyed them. They could have sold them off to some distributor.