I think this is by far the more natural reason. It's just more engaging to wonder what will happen next when you have to wait. Binging content all at once is a great way to feel like the platform has nothing.
But it also leaves you hanging, I bet more shows get dropped because people watch a filler episode and feel like they spent a week getting excited for no reason, or worse the anticipation creates a recipe for letdown. Like watching porn before having sex.
Yes. I suspect that if binging + streaming service hopping becomes more of a thing--it's probably an outlier today--companies might shift to weekly drops more frequently. (Or doing annual subscriptions.) But, for me, I prefer that complex serialized shows are dribbled out. Otherwise I feel I have to stay away from any online discussions because some people will have binge-watched the season in a day.