Their not being suited for mass deployment and having a very niche role is false. Thousands of LAMs were produced.
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By the Star League, which also produced thousands of Banshees and thousands of Chargers. The Star League didn't care whether a particular design was flawed, so long as they could flex their economic muscles. If they'd developed the HVAC, they'd probably have produced thousands of self-disposing Po (HVAC) tanks, as well.
Their advantages only increased once tech started being lost. Those abilities remained after factories started producing new advanced tech Mechs again as those technologies existed when LAMs were originally introduced. Even advanced Stealth Systems existed before LAMs were introduced.
It's now that Stealth Armor, Super Chargers, and XXL Engines are being used on standard units, not just specialty ones that make it harder for LAMs to compete. LAMs still have advantages mostly flight and low cost but the expensive options available to standard Mechs do mean that LAMs are no longer reign as the best recon units and raiders. Ultimately it depends on how much one wants to spend. For a lance of 40 MP Fireballs you can have 2 companies of Stinger LAMs.
As has been pointed out numerous times, the C-Bill cost of equipment is a random, arbitrary number that never changes, in total defiance of how real-world economics work. The cost of an XXL engine hasn't changed from its introduction in Max Tech, back when engineers at the NAIS were assembling them by hand. By the time they reach mass production they're obviously not that expensive.
Beyond that, there are additional costs to keep all that specialized, finicky conversion gear running that the hypothetical 40-hex running Fireball that nobody's actually building doesn't have.
And there's the issue with the meat that rides the metal: the Fireball can be reasonably piloted by anyone who's completed basic mechwarrior training. Maybe not to the fullest extent of its abilities but it's canon that someone who knows how to pilot one Battlemech can effectively pilot any Battlemech. LAMs, on the other hand, require a lot more specialized training. Training that's both expensive and time consuming. You're unlikely to bother giving everyone in your regiment that training, which means that you're always going to have a limited stable of pilots to choose from.
And let's remember that the Word of Blake eventually built their own LAMs that they crammed all the Clantech in that they could, and even then the things failed to be the wunderwaffe that they were hoping for.