I don't know if that is accurate. Southern views on economic diversification were not necessarily that rigid but instead seem to have fluctuated depending on what the price of cotton was. (The decade before the 1850s saw increased focus on cotton production in the south, but that seems to have largely occurred because cotton prices exploded in that decade, making it ludicrously profitable. In times when cotton prices were lower, the southerners were much more open to economic diversification.
"Many planters did invest in railroads and factories of course and these enterprises expanded in the 1850s. But the trend seemed to be toward even greater concentration in land and slaves. While per capita southern wealth rose 62 percent from 1850 to 1860, the average price of slaves increased 70 percent and the value per acre of agricultural land appreciated 72 percent, while per capita southern investment in manufacturing increased only 39 percent. In other words, southerners had a larger portion of their capital invested in land and slaves in 1860 than in 1850.
Although the persistence of Jeffersonian agrarianism may help explain this phenomenon, the historian can discover pragmatic reasons as well. The 1850s were boom years for cotton and for other southern staples. Low cotton prices in the 1840s had spurred the crusade for economic diversification. But during the next decade the price of cotton jumped more than 50 percent to an average of 11.5 cents per pound. The cotton crop consequently doubled to four million bales annually by the late 1850s. Sugar and tobacco prices and production similarly increased. The apparent insatiable demand for southern staples caused planters to put every available acre into these crops. The per capita output of the principal southern food crops actually declined in the 1850s, and this agricultural society headed toward the status of a food-deficit region.
Although these trends alarmed some southerners, most expressed rapture over the dizzying prosperity brought by the cotton boom. The advocates of King Commerce faded; King Cotton reigned supreme."
-Battle Cry of Freedom by James McPherson, pgs. 99-100
I mean, what kind of factories, and goods are the railroads carrying? It's possible for industrialization to occur, but only as a supplement to primary production, similar to how petrostates also build pipelines, oil terminals, and refineries. That does add value to the Confederacy's exports, but it doesn't really allow for true diversification from cotton and is still centered around extraction.
Was the North really interested in investing in the South?
Yes. The largest steelmaker in the South, the Tennessee Coal, Iron and Railroad Company, was formed by New York investors and saw its greatest growth under Hiram Bond, another New Yorker, before being bought by the Northern-based US Steel in 1907.
The Southern Railway, one of the precursors to Norfolk Southern, was formed by JP Morgan, while the other half of NS, the Norfolk and Western Railway, was acquired and expanded by a Philadelphia bank.
Ingalls Shipbuilding and Newport News, the largest shipyards in the South, were established by businessmen from Ohio and Connecticut respectively.
Investors had a chance to invest at rock-bottom prices given the postwar devastation and underdevelopment of the region, an easy recipe to guarantee profit.
And of course, there was Reconstruction, which also spent significant sums of money rebuilding and repairing infrastructure across the South. The Army Corps of Engineers made significant improvements along the Mississippi, well after Reconstruction ended.