Starship is heavy lift / heavy expense. If you want to put 1 small-sat in orbit, you don't use Starship, you use a Rocket Lab Electron. It's MUCH cheaper. Or you wait until you find 600 other small sat users who want to launch into the same / similar orbit.
The talk I heard was that New Glenn was supposed to be BO's answer to Starship (or more likely Falcon Heavy) that could launch a bunch of Project Kuiper satellites into LEO so Amazon could compete with Starlink and feed Amazon's Ground Station as a Service offering.
If we are to believe the published numbers, New Glenn can lift 50 imperial tons to LEO, Starship Block III will hoist 200 tons and Falcon Heavy will lift 50-60 depending on how re-usable you want your launch to be.
I'm not a heavy lift sales-person, but I've been in the room when they discussed what they thought they could sell to govt / mil / commercial customers. So take this with a little bit of salt... Seems to me BO was targeting a slightly smaller launch vehicle than SpaceX was going with so they could decouple schedule with Amazon's Kuiper Project. You don't want to have that cool new rocket you developed dependent on a satellite constellation that gets delayed. So you have a rocket that would be easier to fill with a number of small to medium sized satellites to LEO or (fewer) to GEO.
And like other people on the thread have commented, it seems BO is a decade behind SpaceX, so... yeah... a big rocket that competes with Starship is pretty risky for BO.
And yes, I understand that BO is independent from Amazon, but from what I've seen this is just so they can execute on a schedule that isn't determined by AMZN's board of directors. They seem pretty closely related, just from talking with Kuiper, GSaaS and BO engineers.
I don't work for any of the above mentioned companies and have no insider information. YMMV. Just my guesses from watching some of the personalities involved for the last 30 years.