I'd be surprised if the right-wing obsession with her family's oral history factored in. Obviously the right-wing dimwits are going to find a pre-fab scandal to apply to anyone who runs as a Democrat, so there's no reason to allow the existence of such nonsense to influence political decision-making. But Warren has other issues in being arguably the most liberal member of the Senate:
https://legacy.voteview.com/SENATE_SORT113.HTM
Although this is probably not going to be a popular read on the situation from my fellow lefties, the truth is that 2016 called into question the viability of a very lefty liberal. The chattering classes may have gotten very excited for Bernie Sanders (and so did I -- I voted for him), but he just wasn't competitive against Clinton. Clinton beat Sanders by over 12 points in the popular vote, and won vastly more delegates. And as wide as that gulf was, it would have been still wider if not for the peculiarities of the primary process, which allowed Sanders to perform well in caucuses, where a very small number of hard-core supporters can sway things.
When you look at 2016, it's just not that promising from the perspective of the political viability of a hard-left candidate. I'd love to say otherwise, since I'm closer to people like Warren and Sanders than people like Clinton. But I have to be honest. And I suspect Warren took a look at that and realized the best she could hope for is a Sanders-like gadfly role. Someone like Gillibrand, solidly in the center of the Democratic party, would likely trounce her in the primary the same way Clinton trounced Sanders.