We do just assume that’s the case. That the concept of a quick follow up companion piece album, of mostly/wholly mellow, meditative songs about a pilgrims journey, was killed because it would have required a larger shadow from No Line, and that not having that meant that perhaps the idea of a poor performing U2 album followed by a poor performing U2 album (even if the second one was always intended or expected to be a ‘lesser’ album) would have been too much of a difficult story for them.
But that might not be the case. It probably is at least a part of the story, likely is a major part of it, but this is U2 – when they went back to the material they might have just thought it’s actually a bit shit, or they could have misjudged what people did/did not like about No Line and the equivalent remaining material suffered (likely - Bono does seem to point the finger at the more interesting, ‘thinky’ stuff from No Line, and not the unimaginative singles they released.)
Or of course, when they went back to it, it naturally started to evolve into something else, and spark something larger and quite different, leading eventually into roping Danger Mouse in to harness it and reign it in.
It’s probably a mix of all of the above.
And I wouldn’t find it at all surprising to have this album released and to then read that a decent chunk of it originated during the No Line sessions, the left over stuff. Whether its whole known tracks appearing, or just ideas that then shot off in very different directions. I very much doubt they wholly, definitively hit stop this/start that at any point. It wouldn’t even greatly surprise me to see the ‘Songs of Ascent’ name remain, and alongside that, its thematic concept remain as at least Bono's starting point, just developed into a more ‘normal’ U2 album format – ie not a meditative, mellow album, but hey, a song of ascent could/should be, you know… unos! zwei! trois! hatchi! EL-E-VA-TION! TURN IT UP LOUD CAPTAIN SUPER MOUSE! (ugh) if you know what I mean.