They're trying to scrap this universe for a massive reboot
That doesn't seem to be what is happening. This is from the Hollywood Reporter article:
The projects are being shelved but like many comic characters, could come to life down the road. DC Films, led by president Walter Hamada, is leaving the door open to revisit these properties in the future, but insiders note that when it became clear the upcoming DC slate did not have a natural spot for New Gods or The Trench over the next few years, execs believed it was best not to leave the filmmakers hanging in development without a clear end in sight.
DC is currently building an interconnected slate in which projects will feed in and out of the big screen and the small, with films such as James Gunn's The Suicide Squad (Aug. 6) spinning off into the John Cena-led HBO Max series Peacemaker, and Matt Reeves' The Batman (March 4, 2022) spawning its own Gotham police department focused show.
With The Trench, sources say that the upcoming Aquaman sequel was considered enough, but Warners could come back to it down the line if there is thirst for more adventures set in the Atlantean kingdoms. It was also considered a possibility for streaming, but it is more of a standalone story rather than having a strong tying into Aquaman or the rest of the DC universe.
New Gods, which would have been a sprawling tale, was complicated by the fact that its villain, Darkseid, just appeared as a major foil in Zack Snyder's Justice League and there was a desire to have space between the latter and any new appearances.
Ava DuVernay's 'New Gods,' James Wan's 'The Trench' DC Movies Not Moving Forward at Warner Bros. (Exclusive)