I was thinking the same thing. Mortensen goes on and on about plastic lighting.
And I have a paper by Heinrich Kuhn, the inventor of the Imagon and who died in 1944, I think, where he talks about "The plasticity of the pictures (the Imagon creates)....."
Given the goal of a lens like the Imagon was to create "dreamy", idealized portraits, I suspect plasticity in his context implied smoothness and softness of texture, not sculptural and defined.
A search on 'plastic'+'art' will give a good overall view of how the term was used in contemporary art history and criticism.
In short: the plural, 'plastic arts', seems to mean a straightforward catagorisation including sculpture and painting; the adjective 'plastic' is often used in the sense of 'interpretive' or 'non-literal'. It's this second meaning that Steiglitz would have been thinking of when talking about the plastic qualities of pictorial photography.