Wasn't there a video interview where Shift's producer Patrick Soderlund stated that's what happened ?
Whether you want to believe him is up for debate though...
Anyway, isn't there an arcade & so-called sim (Elite) mode in Shift 2 ?
If he did say that then I am utterly stunned at the total rubbish they think they can feed us. No developer that knows how to make decent sim physics (this is really hard to do, REALLY hard!) has just switched it off at the last minute because they suddenly realised everything they had been working on would be inappropriate.
Besides, it wasn't "switched off", because the physics aren't toned down, they're inaccurate. A game like Gran Turismo might have toned down physics, Shift has insane physics.
I also wouldn't count on any "Sim (elite) mode" being anything like a sim, it will just be harder to control. Which is the point I am trying to make, if you're going to have an Elite mode that is totally unassisted and difficult to master then why not model the phyics on the real world? The easier modes would benefit as well, it would handle like you would expect a car to handle in real life but with tons of assists, making it easy enough.
Anyway, it feels like I'm beating a dead horse here, non simmers seem perfectly happy with the way Shift handles and SMS have made it pretty clear that they're just going to pretend to cater for the sim racers, but totally ignore them.