Because it does not deliver on its promises.
After hearing how much better is going to make the experience, blah, blah it turns out to be just meh. Its not bad (well, sometimes it is), but even when done at its best like on Avatar or Tron, it doesn't enhace the experience all that much.
Obviously, cinemas and TV manufacturers were hoping it would, and that you would be willing to pay premium prices. And that kills it, for most people it's not worth it and the marketing push just makes you feel like manufactures think you're an idiot
On the other hand...
Surround sound for home was once perceived as a monumental waste of money.