What were the two small hands of the Tyrannosaurus Rex used for?
The most likely scenario is that for species predating the dinosaurs, the forelimbs were already functionally useless, thus undergoing continuous degeneration during evolution.
It's the reverse—they became smaller because they were useless, not the other way around. It's the result, not the cause.
Update: My previous answer was easily misinterpreted as supporting the use-and-disuse theory. What I wanted to express is that for the dinosaurs' ancestors, because the forelimbs were not particularly useful for survival, individuals with smaller forelimbs and those with slightly smaller forelimb mutations could all thrive and compete on the same level. Smaller forelimbs might even have been advantageous for increasing speed and balance, or perhaps environmental conditions and food sources had shifted, making them more advantageous than larger forelimbs, leading to the gradual elimination of the former through successive generations until the dinosaurs appeared. This is standard Darwinian natural selection – survival of the fittest!
Even so, absolute short arms still possess greater size and strength than humans. Refer to Satoshi Kawasaki's illustrations:

This is a visual contrast.
Another artist is most famous for his series of works, 'What if human skeletal structures were like animals'
Kawasaki's style is devilish, with quirky ideas, but it must be acknowledged that the reality of nature is exactly as he portrays it (crying with laughter).
One illustration perfectly demonstrates that simply adding wings doesn't make you an angel capable of flying (ruthlessly destroying naive fantasies).