The Marines tried the UH-1N rebuild but quickly went new purchase of Y Models....so they had already shown the USAF the path forward.
Nothing like having a one off version with no parts commonality with other Military users. There is a cost savings in that concept that I am sure did not get a proper evaluation by the USAF.
The question might be along the lines of LM was new to ther helicopter game and did not have management with the level of experience or developed relationships with those doing the buying.