Pretty much, plus simply tourism and religion as well. Places like Laos and Cambodia are landlocked, hence lower tourism overall, whereas Thailand has beautiful beaches and islands all over.
Philippines has a thriving sex worker scene, but is also a Catholic country hence government and society at large are less accepting of sex workers. Whereas Thailand is Buddhist hence overall more tolerant of, well.. everything, because that's just part of being Buddhist.
Then like you said, Pattaya was the R&R place for US soldiers during Vietnam. Thailand simply got addicted to all that foreign money and both, government and society at large were all too happy to alter their views and acceptance of sex workers / tourism in exchange for keeping that cash flowing, houses bing built, etc.