I was under the impression that we paid for this in kickstarter. Was that not the case?
Actually by the end of the Kickstarter, the final stretch goal was ever so slightly out of reach (after tallying up paypal). In the Kickstarter ending stream they said that because it was so close they would do it anyways.
Now I am not sure if they stopped accepting paypal pledges at the same exact moment with Kickstarter but I would assume so. But if that is not the case it may in fact be that the goal was actually reached (the site certainly lists is as achieved, however, that could just reflect the verbal promise during the stream as well as actually reaching it).
Either way, they overestimated what they could do timewise basically (not to mention the release was technically pushed back once already afaik). So rather than try and do it and push back the release even further or potentially run out of money before it is complete they chose to axe it. The update video talking about this explains the "why" of it pretty well.
The gist of it being that it would complicate existing systems and require way more time to test and develop than they have resources for, and rather than compromise their vision of this feature because of constraints they chose not to do it at all. However, the engine and editor support for it already exists so it is more accurate to say that the main campaign will not be using it rather than it not being done at all is my basic understanding of the situation. Of course outside of aspiring modders and content creators this is poor consolation but better than nothing.