Problem with that theory is the early 1898s were made with 1896, not 1898, sights.
M-1898 rifles started leaving the line just before the Spanish threw in the towel. If they ran out of sights about that time why didn't the last of the 1896s get 1892 sights too? Next question: where did they get the 1892s? The 1892 rifle were still in service. Recall 1892 rifles to take the sights off them to field 1898s? The 1898 wasn't an "improved" Krag - it was a "less expensive" Krag. So why take the trouble to sideline one rifle for another?
By the time they stopped using the hotter cartridges the 1898s had been coming off the line for some time. The 1892s and 1896s still existed. So where was the demand? The PI? Count the troops sent and the Krags available and you'll find a surplus. Militia? Dick Act came well after the 1901 sight swap game.
After they dropped the 1898 sights they held the guns at SA until sights were ready. It's in their annual report.
So we're left with two problems:
1) Why would they do this when they had more rifles than they needed?
2) Where did they get 1892 sights? The 1892s were in service. Doubtful they made 1892 sights at that time in great numbers as it's just as easy to make the 1896.
Me thinks Frank was staring at his navel.