Actually, a lot of people did, including Matt himself. I remember him talking in an interview about how there was a moment during the fight when he was wondering when the magical submission would come, when Royce would find a way to snatch an arm or lock up a choke. Part of that was the Royce Gracie mystique, to be sure, but then when you considered that submissions were for a long time Matt's kryptonite - getting tapped by Dennis Hallman not once but twice, getting choked unconscious by Newton in that triangle that he luckily slammed his way out of, losing his belt to BJ by RNC, and having to fight like hell to not get triangled by Charuto - it was by no means beyond the realm of possibility.
For comparison - and, as one of the biggest Ken Shamrock fans to ever post on this forum, this kills me to say - it was a hell of a lot more plausible to imagine Royce submitting Matt than to imagine Ken submitting Tito.