The population of Marin County is only 258k, and more like 175k when Bart planning began. Building that line would probably serve more people in SF than in Marin, so it never really made sense.
If they added BART there, the potential for adding density would make more sense. Obviously other factors like terrain and NIMBY-ism play roles as well, but you don’t need to reject all rail options within reach of a major metro just because people don’t live there yet.