At that time the intelligence community en masse had this view, from France to Australia and Russia to China. The reason was very simple: radio and mobile intercepts from the generals in Iraq indicated that this was the case as they all had this belief. Saddam wanted everybody to think that he had them in order to prevent an Iranian attack.
The problem was that we all wanted this to be the truth and was unable to think outside the box as the consequences would be disastrous if the had them but the intel estimate was that he didn't. Better safe than sorry!