I would venture that the original primary market of the 12" arm was the broadcast industry, and that was partly driven by the broadcast industry's use of larger diameter records sometimes. Home audio's use of 12" arms was always marginal. LPs have pretty much disappeared from broadcast studios, so manufacture of 12" tonearms dropped precipitously.
But as vinyl has been revived in home audio and gone decidedly upscale, a compact footprint is no longer an essential sales point. A larger turntable footprint provides the platform for trying a 12" tonearm for lower tracking error. So if 12" arms are on the rise again, it would be purely in response to the home market, whereas before it was driven by the broadcast industry.