Steel was used before for the early Atlas rocket models. But the skin was too thin and collapsed on its own weight. You can see YouTube videos of this.
Here, specifically, with regard to steel rockets? SpaceX stopped optimizing for weight and used thick steel. SpaceX optimized for cost and practicality. Brute force rocket engineering, rather than "the best performance numbers on paper" which is where a lot of rocket designs seemed to get lost in the weeds of some component that ends up being a massive maintenance mess but gives you "the best performance".
The steel tanks that collapsed in the sixtys? They were so thin they needed pressurization at all times or they would collapse. SpaceX realized that was a design and maintenance risk, and just built thick tanks.