Benefit of 64-bit only? They don't have to develop and test everything for two architectures, and if there are CPU extensions only available on 64-bit processors, they can start using them now.

New instructions and only having to deal with one codebase are big, but there are some fringe reasons regarding security that I could see also being a factor. A 32-bit processor means something like a thunderbird athlon on the high end, maybe an old Pentium 4. Single core and pushing 30 in the best cases. You need an operating system that supports that chip, and there really is only so much you can do to make that setup even work in 2025.

It's more a matter of why support that? Trying to run steam on a single core Athlon from 2000 would be painfully slow, to the point of being unusable. You couldn't reasonably even keep steam running with a game, it would hog too much CPU. It's possible to try it if you have an ancient tower laying around (don't use your real steam account online with something like windows XP, it will be compromised in seconds connecting to the internet).

People with systems like that are going to need to use gog installers or use period accurate methods to install games. 32-bit only processors were already on the chopping block when steam came out, they really can't handle modern steam. It would be a bit unreasonable to expect them to add a separate version for those chips, especially with the vulnerable operating systems they require going online being an issue, so we are left with a vestigial feature of 32-bit support for no great reason.

It really just makes more sense to cut it than keep it for the sake of novelty. There is some liability in keeping it, as well as technical overhead.

Sorry for the ramble.