> what makes you think they couldn't produce a larger, smarter, more expensive model?

Because they already did try making a much larger, more expensive model, it was called GPT-4.5. It failed, it wasn't actually that much smarter despite being insanely expensive, and they retired it after a few months.

that was not a reasoning model.

None of them are reasoning models. Some of them have a loop of word-outputting.