I would be suprised if it's primarily a technological reason.
My thinking is: The Rift S is 99.99% used for "serious" gaming and PCVR will always be that way. For serious gaming you'll probably need some kind of controllers for the near future, since you want that fidelity and haptic feedback. Now, controllers could be replaced some day by braceletes or what not, but this is not going to happen next year.
The Quest and its successors (i.e. stand-alone VR), on the other hand, is and will be more and more used for lighter gaming, video, browsing, productivity, fitness, social etc. Often times, hand-tracking will be enough without the need for controllers.
Therefore, they focus their resources on bringing hand-tracking only to the Quest.
My guess is it's partly that but also mixed in with aligning to their mass market consumer ambitions.
I've given my Quest to countless people to try out and while every single person is blown away, many / most of them are challenged to use the controllers as anything more than simple pointing devices without significant training. With hand tracking that all goes away. You just use your hands how you normally use them and it "just works". It's similar to how the original iPhone captured everybody's imaginations because it offered such intuitive gestures to control its UI.
If you see the Quest as their "mass market" device and then you consider that their top priority is to knock over every barrier that stops it spreading like wildfire, then it's a no brainer to eliminate the controllers.
+1. Also worth noting, the implementation would be fundamentally different. On the Quest it's running on-device on specific chips, whereas on the Rift S this processing would be done on the user's PC.
It's doable, but you probably can't just drop the implementation for hand-tracking on one platform and have it work on the other.
The Quest can link to your computer and essentially act as a Rift using a USB cable (needed to be USB 3.0, a recent beta update knocked that down to USB 2). I can easily see the Rift being removed from the product line in the future.
My thinking is: The Rift S is 99.99% used for "serious" gaming and PCVR will always be that way. For serious gaming you'll probably need some kind of controllers for the near future, since you want that fidelity and haptic feedback. Now, controllers could be replaced some day by braceletes or what not, but this is not going to happen next year.
The Quest and its successors (i.e. stand-alone VR), on the other hand, is and will be more and more used for lighter gaming, video, browsing, productivity, fitness, social etc. Often times, hand-tracking will be enough without the need for controllers.
Therefore, they focus their resources on bringing hand-tracking only to the Quest.