1. Why? You've said this as if it's self-evident, but it isn't. What's wrong with alerts/notifications for updates? I guess you could argue "alert fatigue" would lead to people ignoring it, but then ok, if I go with this...
The general principle of how Bitcoin Core operates with updates is that users can and should update at their own pace. The developers should never pressure users to update to a new version of the software. By using such an alert system to inform people of new software versions, we would be pressuring people to update more so than not informing them at all through the client.
2. So keep the alert system for hard fork changes? There's a huge wishlist of things that are never going to be implemented at the current rate because nobody wants to do a hardfork - for the very reason that you can't get users to upgrade their software. Why isn't an alert system seen as a solution to this problem?
No, the alert system is for security events and network breaking events like unintentional hard forks. Intentional planned hard forks should also not be announced via the alert system as that would be pressuring users to upgrade to a new version which we want to avoid.