I think the short answer is the rather rapid scale-down of the Apollo Applications Program that envisioned lots of Saturn 1B missions to a series of Skylabs.
Once it became apparent that Skylab was all AAP would amount to, NASA studied moving Saturn IB launch operations to the VAB and LC-39 to consolidate all launch operations — the remaining Saturn V launches and the Saturn 1B traffic for Skylab and ASTP.
Thus, one MLP was modified for Saturn IB use (the Milkstool) and LC-37 was decommissioned.
See the NASA Histories Moonport and Living and Working in Space for more on this issue. Also my article "The Future of Manned Spaceflight: The View From 1966" in Spaceflight magazine back in 2007 for a look at the Saturn traffic NASA envisioned before the budget cuts curtailed it all.