“So... was this decision based on the realization that hydrogen fuel-cell batteries can never generate power, but only store it?”
I think you have the concept backwards. The point of fuel cells *is* to generate power directly from gaseous fuels, rather than store power like a lead or lithium battery. The problem is practicality and cost. Hydrogen is an ideally clean fuel, whose only catalytic byproduct is water. But, hydrogen gas would be impractical, dangerous and expensive as automobile fuel. Efforts to use hydrocarbon gaseous fuels have apparently not been as successful as hoped. I think contamination of the cells by those fuels is the problem, cutting their lifespan too short to be marketable.
At least in the 1990s, when fuel cells were supposed to be the next revolution, they sounded a lot like perpetual motion machines. No matter how they work, it will always take more energy to break the covalent bonds of hydrogen-containing compounds to get elemental hydrogen than can be retrieved by combining hydrogen with oxygen. For that reason, fuel cells do not generate power, but can only convert it.