Digital wallet versions of those cards still work fine, though. I visited Japan a month ago and found that on iPhones or Apple Watches you don’t even need a special app — the stock Wallet app can generate new virtual Suica, PASMO, or ICOCA cards on demand.
IIRC it was the temporary ones not being issued. There are IC cards that are "branded" to only function for a month (or 3?) meant travelers. But they have decided to save the chips for standard IC cards.
I haven't been there since May, so I heard that the chip shortage is affecting new IC cards, although your sentence seems to indicate that's a permanent change?
Anyways there are still plenty of people with IC cards even if they stopped issuing new ones. Most people have probably had theirs for years.