I doubt its discontinuation had that much to do with the price. A lot of Japanese market electronics until ~2010 were intended to capture that season's bonus pay in one big batch and then go out flush by the next one, more like movies than cars, or iPhones today. All all-new and groundbreaking every halves of years.
Moore's Law was in full effect too, everything was going obsolete as quick as time itself. Specifications values inflated in orders of 10^2 units per week, whether it was megahertz or megapixel or megabytes or grams. Making last year's new product, even with parts upgrades, was waste of time.
The big thing is screen sizes obsoleted the need for the expanding keyboard when they became cost-effective for "normal" keyboards and the device itself could be lightweight by being thin rather than small.
"Thin and large" is specifically American obsession. Those weren't just major technical challenges, Japanese users cared less about those two aspects. People wanted an inflatable do-everything brick. The butterfly keyboard served that demand.
Moore's Law was in full effect too, everything was going obsolete as quick as time itself. Specifications values inflated in orders of 10^2 units per week, whether it was megahertz or megapixel or megabytes or grams. Making last year's new product, even with parts upgrades, was waste of time.