Having been a developer during that period of history, I'd say OP gets it about right, that's what happened.
For better or worse; it's not obvious to me that it was a poor choice. I do agree it somewhat misappropriated the "REST" term and misrepresented itself as being more "standardized" than it was -- also for more or less the reasons OP suggests: "that would have seemed recklessly blasé next to all the formal specification work that went into SOAP… a veneer of academic respectability".
Although I do recall some people right from the start really were interested in HATEOAS and trying to do it... I think it's practical benefits were somewhat elusive. It reminds me of "semantic web" in some ways, not sure if that makes sense...