Starting with a Notice of Inquiry in 1991, and ordered in 2004 (yes, it really took over 13 years for the gears of governmental progress to get from "should we do this?" to "we're going to do this") narrowbanding refers to the conversion of land mobile radio systems from 25 kHz channel spacing to 12.5 kHz spacing. It was first formally considered in the 1991 NOI because, before cellular phones became affordable and widely available, land mobile radio spectrum in some areas was very scarce. In many major cities during the 1980's and 1990's it was often impossible to add new channels.
Dissolve (as they say in the movies) to late 2012. Many commercial land mobile radio users have switched over to cellular, cellular push-to-talk, or even smartphone push-to-talk apps. It doesn't make sense to pay an LMR repeater provider for something that has limited coverage, limited flexibility, and requires professional installation in a vehicle. Yes, LMR works when disaster strikes, which is one of the reasons why amateur radio has kept non-cellular radio in its arsenal of disaster communication solutions. For the average commercial user, cellular makes more sense operationally and financially. So there's a lot more LMR spectrum to be had, and yet the narrowbanding mandate continues; a 2013 solution to a 1986 problem.
Why are we even bothering to continue? There are a wide variety of possible reasons, the sum of which probably answers the question. The government doesn't like to admit it made a mistake, or that its thinking is two decades behind the technology curve. It wouldn't be fair to let some people off the hook, when others have already made the change. (Although this doesn't hold up, because obviously big cities mentioned above ARE being let off the hook.) And of course there's big money to be made in narrowbanding; the government charges a fee to modify a license, and the radio manufacturers charge taxes on sales of new radio equipment.
All of the above reasons would be perhaps excusable if the end result were something desirable like interoperability, but we're farther away from interoperability than we were 20 years ago. (Ref: "Meeting the Interoperability Challenge", Witkowski, CMU DMI Workshop 2012) At the same time the FCC has been beating the narrowbanding drum, it's also allowed proliferation of incompatible radio technologies into public safety communications. So where before we had everyone on analog FM but at different frequencies, we now have FM, P25, NXDN, DMR, etc and the frequencies are still not aligned. God forbid these people get hold of our healthcare system. Oh wait...