Because the game was designed as a portable game for a handheld console, if they had made it for the N64 it would have been a completely different game. And if you just plopped it onto the N64 as is it would have gotten a terrible reception. It looks decent as a gameboy game, but if kids of the 90s were comparing it to all the 3D graphics on the N64 it would have looked incredibly dated. Heck it looks bad even compared to SNES games, especially if you are looking at the original Japanese release sprites. Generally you want launch titles to show off the capabilities of the console and releasing a gameboy game on the N64 would not do that by a long shot.
And if you just think that you should be able to play Pokemon Red/Blue on the N64, there's Pokemon Stadium. You can even play it at 3X speed (or 4X on Pokemon Stadium 2).