Exactly. Producing small trucks with the options/amenities American consumers expect was less profitable than shifting that consumption to full-size trucks.

In the same time span, full-size trucks have grown a fair bit, so it appears it's now possible to market a mid-size truck (the Canyon and Tacoma are quite a bit larger than the old S-10 or Ranger). Nobody is actually selling compact trucks in the US any more, nor does anybody plan to do so (that I've seen).

I thought the death of the compact truck was more due to the fact that full sized trucks now get good enough fuel economy that's it's just not worth having a smaller truck.

The problem was CAFE; the Ranger was too small and too inefficient to meet increasingly stringent CAFE standards. CAFE rules are based on the "footprint" of the vehicle, basically the area between the wheels, and in 2012 the "light truck" target would edge past the Ranger's footprint/economy combination. There's a detailed article here: http://www.thetruthaboutcars.com/2012/10/how-cafe-killed-com...

Redesigning the Ranger to have a larger footprint results in a mid-sized pickup only slightly smaller than the base model F-150, which is where the sales-cannibalism problem comes in.