Yeah this is really it. The answer is that there used to be significant technical reasons to do so. Technology improved enough each year that last year’s phones were really showing age.
At this point even basic phones are so fast and so feature rich that no one except niche groups needs anything faster than what came out several years ago. Everything basic like watching videos, maps, internet browsing, and messaging works perfectly fine on anything.
So the reasons shifted to renewing battery life and OS updates. Which are both at least somewhat artificial since manufactures could easily implement longer updates or replaceable batteries.