I think Icelandair now realizes that their decision to go for the MAX instead of the NEO (and it was a close call!) was a mistake as perceptive people could already see back in 2013 when the choice was made. The A321 and especially the LR version is easily the airplane that comes closest to fitting their needs. And the likely introduction of the XLR which would be capable of flying to places like LAX, SAN and SFO from KEF just makes it more obvious. To be fair to the board, they probably did not know about that possibility back then.
I don't think this has anything to do with the MAX groundings or Icelandair being unhappy about their relationship with Boeing. It is just that Airbus has a product that is more suitable.
I agree, and on the larger end it wouldnt surprise me if Icelandair orders 787 again, or possibly the NMA once lauched.