Well, I can imagine too, that the original idea was for its intended eventual use to be, after the system was vetted, as an archiving format.
Certainly as a recording or production format, it was rather not fit for purpose. That had to be known very early on. Your/BE's scenario would mean that mean Sony knew from the start that likely they'd have to use PCM somewhere in the production chain of SACDs (DXD or "DSD wide', as it later was known). Rather than that being a consequence of re-orienting DSD to commercial SACDs, as in my scenario.
tl;dr : That the possible original use case vision -- use as an archive medium -- didn't come to pass (though i don't know how up to date BE's knoweldge is) -- doesn't mean it never existed. Other, more lucrative ideas may well have overtaken it, perhaps very early on.
I looked for BEs detailed explananation for why the claim was 'PR puffery', but didn't find it. Just two separate one-line statements to that effect.