I think this is entirely it - and while we are still reliant on animals for meat and food production, they are no longer made to toil to anywhere near the degree they once were in the developed world, and so this has allowed a shift in our sensibilities.

As you say, it’s a practical issue. In much the same way as esteemed 19th century scientists argued that black people, brown people, Irish people, women, were not truly people, as this made for an easier moral justification for ill-treatment, slavery and genocide, they argued that animals were also insensate simulacra, only giving the appearance of life - for again, it is harder to beat and enslave a living, feeling, thinking being than it is a dishwasher.

Much of what we take as straightforward facts of reality are actually just old, bad ideas, and only in the cold light of the morning after do we start to see the error of our ways in the dark that came before.