I have an IBM oscilloscope from the mid/late 80s that uses 3.5” floppies for storage. They were already standardized at 1.44mb by 1986, and way more reliable ands robust than the bigger disks.

I know the big disks hung on in a few weird places (like the nuclear arsenal supposedly), but I bet ATC ended up with 3.5s as the ultimate magnetic media. As long as they were big enough, why change?

Also as a child of the 80s, I remember just how far the 5.25” vanished from stores when the 3.5 took over.