Well, the truth is complicated, and I think the biggest reasons aren't covered here.
1. Game companies are increasingly reluctant to freak people out. What this means is that making horror games has become almost impossible to do, because anything that could elicit the intended reaction from a genere fan is going to see the most extreme kinds of backlash from industry critics.
Seriel killers are so scary because they actually exist. The deniability inherant in monsters, aliens, and supernatural occurances provides a layer of insulation between the content and criticism. You start dealing with seriel killers though and then you've got something for the critics to latch on to, especially if you wind up with a gamer who winds up killing people in a manner vaguely similar to your game even without any kind of direct inspiration.
2. It can be hard to intergrate a seriel killer into a lot of games simply because of the player's hero doing all the stuff the killer is doing. I mean it's hard to say "this is evil" when you have games where the player runs around stealing everything that isn't nailed down (and if they have a claw hammer they get that stuff down), picking pockets, and striving to arrange the deaths of anyone they run into that has something useful in their inventory. Game developers indeed make challenges around the idea of finding ways to get items without taking more of a morality hit. This is to say nothing of games with ragdoll physics and bodies that break apart where people head out and do messed up things with the pieces.
If you toss a seriel killer into say a game like "Oblivion" or "Fallout" how can you take that seriously? I mean even if your a paragon of virtue you've doubtlessly done worse things than he has, and your body count is substantially larger (by like level 3 in more RPGs your liable to have killed more stuff than the highest real world body counts).
Now, I'll be honest in saying that I myself have looked at the sandbox crime genere, and being a horror fan, have thought it might be interesting to do a game like that based around being a seriel killer rather than simply a run of the mill violent criminal (Mafia, Gang Banger, etc...), however again in doing this I think it would generate more contreversy than the industry wants to deal with.
I'll also say that the motives of a seriel killer can be made broad enough to give him a formula while also making it exciting for the viewer instead of it being the same thing every time. Movies like "Seven" have done this brilliantly in the past. Of course what keeps people interested in such movies are the elaborate kill scenes, and all the depravity. You could do this kind of thing in a game, but the industry is afraid to really push the "M" rating the way the movie industry pushed the "R" one. Hollywood fought long and hard to be able to get away with the things it currently does, and noone in the gaming industry currently has the guts.
Interesting read for sure, but really I think the reasons for the lack of seriel killers are because of a lack of guts from the industry more than anything, and also simply that as I pointed out most games are detached enough from any semblance of reality that a seriel killer just seems kind of laughable.
As a final note for those that read this far, consider that Gilles De Rais had roughly 200 kills and it's suspected it might have been as many of 600. His victims largely being children, and he had accomplices in the form of his servants. His big thing was that he was a sexual deviant who liked to cut his own orfices for penetration out of the bodies of his victims rather than raping them normally. There may or may not have been occult aspects to it as well involving the worship of a demon known as "Baron" or "Barron". If you were to take a guy like this and put him in a game like "Oblivion" you could deal with the whole issue of how detached the player character is from morality by the nature of it being a game, due to this guy beng so over the top heinous. Of course given that Bethesda was afraid to even have children killed, never mind showing what Gilles did to the level of an "M" rating (ie showing everything but cutting away so you never see actual penetration), do you really think anyone will have the guts to go there in the forseeable future? What's more this was a real guy, and doesn't even get into real fantasy territory. Seriously... read about him.
http://en.wikipedia.org/wiki/Gilles_De_Rais
Oh and for those who have missed it, yeah this is the guy they mean when you see writers periodically naming schools (high schools, elementary schools, etc...) after him as a sick joke.
S3.
