> IIRC there was some research from Denmark suggesting the opposite, namely that the significantly harder steel pellets would have a higher probability of punching through bone and hit vital organs rather than deforming and lodging in the bone.

Great point and one I tend to agree with. But this actually causes an issue. At issue here is that the steel keeps its shape and does penetrate deeper without expanding creating shot size holes through those organs which do ultimately cause death after the bird has flown away and later dies. Unless you hit the heart directly the organs will take time to fail.

Lead on the other hand causes more catastrophic injuries which makes the game more retrievable resulting in less wasted game.