Masuda declared it a virtue of logistical challenges. There are over 800 Pokémon types in the game, and the switch hardware is powerful enough to make them all truly distinguishable. That made it much harder to get those other creatures into the public release in time, maintaining a consistent level of quality, not to mention the gameplay balance in battle. The team had talked about several options and decided that the best option would be to limit the import to Galar characters.
It is unfortunate news for players who have carefully cultivated their Pokédexes over the years. However, to some extent, GameFreak recognizes a technical reality in modern gaming. Now that consoles with similarly complex gameplay can handle very detailed characters, importing legacy content no longer requires just graphics and some statistics. Do not be shocked if other game studios take similar steps in the future.