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Hatchbacks are just renamed station wagons. Change my mind.
I'd say a hatchback is a sedan with the trunk/boot removed, while a station wagon has the trunk/boot extended to the roofline. Hatchbacks would end up shorter than the sedan or wagon version of cars.
I do think that branding is also a factor. I remember once reading something saying that that people who get married and have kids and need a family vehicle don't like driving what their parents drive, that it'd be boring and stodgy. So avoiding the station wagon that their parents drove, the next generation drove minivans. The next generation avoided their parents' minivan, and drove SUVs. The next generation avoided SUVs and drove hatchback CUVs.
They all kinda fill the same role, as a large enclosed vehicle with a fair bit of cargo space accessible via a rear door.
Here's a generation-old article from when SUVs were the hot item on the way in:
https://www.chiefmarketer.com/are-we-there-yet-minivan-marketing-is-driven-by-the-changing-needs-of-american-families/
I think it also has to do with the population getting older and fatter. People aren't able to get into and out of traditional sedans anymore, so they need something with more ride height.
That would explain why station wagons didn't come back into fashion.
All the station wagon I ever owned I could comfortable sleep in the back of, with a partner. Hatchbacks are way too short.