It's a combination of local politicians wanting a legacy project, and their erroneous assumption that carriers were lining up to fly long haul to Wellington pre-covid. Infratil didn't even want to even stump up their full share of the project cost compared to their equity in the airport company, which tells you how much return they expect to see from it.
Singapore Airlines had to be subsidised by Wellington ratepayers to fly the Singapore-Melbourne-Wellington route, to the tune of $800,000 per year. Air NZ has stated they have no interest in flying long haul out of Wellington with a runway extension, and that was all in pre-covid times. Seems like a huge expenditure for questionable and uncertain gains.