Nuclear was perfectly correlated with demand for weapons grade material. Historically the only reason nuclear was allowed to even exist as an option for power was for national security reasons. There's no way in hell they would have been allowed to take away free rents from the coal and gas lobbies in the US otherwise...

That's the political and incentive reason they were originally built and why we don't have more nuclear after the USSR collapsed (minus the time lag between when projects were approved and when they were completed.)

However there's a lot of issues with iron powder that aren't being addressed here. Milling energy to get the particle size you want is not trivial. A good example is powderized coal power plants which mill lump coal of various sizes down to 75μm or less. Coal is a hell of a lot softer than steel and they still can spend upwards of 10% of the power plant's energy output just milling their fuel in the worst case. Typically it's a lot lower around 1-3% of the plant's energy output. But we're talking about coal the milling energy to take molten iron castings and grind them down into powder that burns fast enough to fire well in a water tube boiler is not trivial.

And then there's the fact that you're probably going to be using a ball mill to grind it. What grinding media do you use then? Normally you use steel balls but if you're grinding iron down that's going to wear your media out extremely fast and spike your grinding energy needs massively. The unfortunate part here is you end up with either exotic and expensive materials in order to grind iron at this scale or you end up with huge maintenance and energy bills. That's what it seems like to me.

At about 50 kWh of electricity per kg of compressed electrolytic hydrogen, the hydrogen alone costs:

0.055 kg H₂/kg Fe × 50 kWh/kg H₂

≈ 2.75 kWh electricity/kg iron

That is already more electrical input than the iron later releases as heat:

Input to make H₂: ~2.75 kWh/kg Fe

Heat from burning Fe: ~2.05 kWh/kg Fe

More importantly, if we're going to use a metal powder as an energy store why not use aluminum? It burns hotter than iron and carries more energy per kg (it is lighter so the volumetric energy is probably similar) but you can infinitely regenerate aluminum oxide with electrical refining. You take your ash and use electricity to regenerate your energy store. No hydrogen needed (which you probably need to make with electricity anyways...) so your loop efficiency would be a lot higher.