Because the buy/sell spreads are huge (10% is common), there are substantial fees, the machines cost far more than standard ATMs, and the companies behind them provide lousy support or go out of business.

Robocoin stopped selling real Bitcoins and started selling access to Bitcoins via their "hosted wallet". "Hosted wallets" have a terrible track record. You don't own the Bitcoins, the wallet company does. They just owe them to you.