Usually, because it doesn’t work … well enough … to simulate an A+ user experience.
Pre-populated demos sometimes can work well, especially where you have an app that (x) doesn’t make a lot of sense without data AND (y) the trial user is unlikely to realistically input real data herself.
But I think what we’ve learned is a sub-optimal experience here is a real turn-off. Better not to do a Demo Site or Demo Org if it doesn’t convey the richness of the experience.
If you can’t make a good pre-populated demo, then you’re going to have to have a more engaged onboarding experience. There are no shortcuts here, folks.
