Supposedly simulcasting was the expectation that within a few years, radio broadcasting would shift from AM to exclusively FM. The FCC made the point that this was not going to happen by publishing the anti-simulcast regulations in the late '60s.
I see no evidence that FM was supposed to replace AM.
Once the band was moved to the current frequency range post-W.W. II, there was huge activity building FMs. By 1940, there were 1000, and many were independent and others were co-owned with an AM with all or some different programming.
By 1960, we were down to 700 FMs, and most of the independents were gone and most separate programming was gone, too. FM stereo was supposed to revitalize FM, but in the first two years only about 100 stations went stereo. While there was a rush to pick up FM licenses in the early 60's, most FMs continued to be sisters of AM's; the owners simulcast to keep the license just in case FM became worth something.
Simulcasting was a device used to retain a license and to keep it from competitors. AM stations that got FMs feared that they would become successful, as that would drain listeners from the profitable AM operation.
Nearly 30 years after the first FMs went on the air on the old FM band, the FCC mandated an end to most simulcasting (daytimers and some others were excepted) in January, 1967. It took ten years more for FM to achieve parity with AM... up to the early 70's, big companies like Storer were selling FMs as they had given up.