You've all guessed exactly right - here is was the NEO Observation Program
Executive at NASA Headquarters just wrote to me:

"The number published on the JPL website is the number determined by using
the estimated average brightness in visible light of a 1 kilometer
asteroid. However, NEOWISE has found the Near Earth Asteroid population
is actually darker on average than previously thought, so more of the
asteroids that we thought were somewhat less than 1 kilometer in size are
actually larger than that.

NEOWISE has given us a more accurate measuring stick to determine the size
of the known objects, but we have yet to go through that entire catalog to
re-measure them and adjust the numbers in the database that is used by the
JPL website.

This actually answers a bit of a mystery we were having with the NEO
survey, because the discovery rate was leveling off, meaning we had found
the larger part of the population, at a lower number than we thought it
should if the population was indeed about 1,000. NEOWISE shows we've
found more than we thought we had and the numbers then come into agreement."