Well, yes those other services were profitable, but without local service there was no long distance or anything else.
The new homes being built in the suburbs tended to be for more affluent people who would want premium services which cost extra, like color phones, extra extensions, intercoms, etc. Also, suburban callers tended to have higher bills; unlike cities which had a wide local calling area, the suburban areas were short and they had to pay extra to call the unit.
Let's remember that these new suburbs had businesses too, and they needed phone service. Suburbanites would use the phone more so suburban businesses would have more phones than a city business might. The postwar world had displacement, so more people would be making long distance calls to call home.
None of this profitable business growth would be possible without local service to bring it all together. But you are correct that local service was delayed.
There are articles that Bell complained developments would go up without notice to them to prepare for it. I know Levittown PA didn't have phones when built and they had corner kiosks with pay phones at first. Eventually a big new C.O. was built. Bell did a lot of construction in those days (it was more than just building switches, they needed a building to house them). I think this happened in a lot of places in big new developments. A lot of small towns were horribly overwhelmed in all sorts of way by these developments. Many early people in these communities did not have an easy time of it, nor their kids who were forced to go school in shifts or in makeshift facilities. Mothers who didn't have a car were prisoners in their home all day long. Fathers spent hours in traffic on lousy roads.
The 1950s suburban dream wasn't quite as idyllic as we think. Back then people never talked about their personal emotional problems. Some couples were very stressed out by it all. Some got caught up in "keeping up with the Jones" and were obsessed with status seeking and employment advancement (their kids would rebel against that lifestyle in the 1960s). Some were heavy drinkers or physical abusers, but again, this was kept quiet. Some couples were married in the wartime rush and weren't meant for each other and were miserable, but divorce was out of the question in those days.