but those dimensions weren't big enough to accommodate the battery material itself
So... battery supplier problem just like the GP said.
Yes and no. Samsung specified both the enclosure size and the watt-hour capacity (which determines the size of the material inside). Thus, if it wasn't physically possible to meet both specifications at the same time, the specs were ultimately at fault.
The battery supplier is, of course, partially to blame for not detecting the problem and telling Samsung that their specs were infeasible, but unfortunately, that's all too common when dealing with contracted manufacturing. They'll build hardware to your exact specs, and if your specs are wrong, they'll build the product to those specs anyway. I'm not excusing that sort of behavior, mind you, but it isn't at all unusual.
That's why IMO the buck ultimately stops with Samsung, who created the faulty specs that were beyond the limits of the underlying battery technology. Apple fans beware: This is where the obsession with thinness ultimately leads.