Honestly the non 3" version had nothing to do with it based on anything I have ever read on this subject. This was the best explanation I have seen
This is the overall outline of the legend of the SX1 which may or may not be 100% fact
1. Accounting procedures at Winchester in the middle 1970's were atrocious.
2. About 1978 outside accountants were hired to give a report, and management found out the awful truth
3. The SX1 cost about $300 each more than they brought in for Winchester. The more guns made, the worse the losses. There was no way to materially lower costs and no way to raise prices.
4. There were warehouses full of unsold SX1's.
5. The last SX1 action was made in 1978 and all sales after that date were "cleanup".
6. The project lost over twenty million dollars and crippled Winchester, leading to it's sale to the employees by Olin in 1980
7. Most of this information came from a series of interviews that a former Winchester executive gave to a gun magazine in the early 1990's where he defended management's early 1960's decision to cheapen the guns in 1964. But he admitted that the SX1 was a financial disaster, but an excellent shotgun. The point was that it was better to make lots of cheap, profitable guns that expensive guns that lost tons of money. Or something like that.