See
https://www.railforums.co.uk/threads/operation-princess.61372/ for example.
Flawed premise that more frequent but shorter trains would do a better job than less frequent but longer ones.
Plus a budget that only allowed for what was built.
And an SRA/DfT view, after Virgin proposed additional stock, that "no more money will be thrown at XC" until it is profitable.
The only relaxation since, until the recent promise of ex-Avanti Voyagers. was the limited provision of HSTs (already departed).
Arriva XC did eventually come close to breaking even as a franchise, but then Covid ended the franchise era.
The lack of alternative 125mph-capable non-electric stock has been a problem throughout the life of XC.