By 1940 were battlecruisers obsolete, or did they still offer a useful specialized role?
Short answerThey retained niche advantages, but fast battleships covered enough of both roles to be the better financial and operational choice.
NotesA specialized battlecruiser can still be faster than a fast battleship, and a slow battleship can devote more weight to protection. Technology eventually made it possible to combine enough speed, armor, and armament in one hull to cover most of both missions. That operational overlap made a single fast-battleship type easier to fund and deploy than separate specialized designs. Treaty rules reinforced the convergence by counting both ships in the same capital-ship category.