I think the reason is the volatility Bitcoin still having. That could be why mBTC isn't more adopted even though it is a fine option.
Umm, what does volatility have to do with naming adoption acceptance? Please GTFO and stop shitposting in Dev & Tech.
mBTC has never been used to represent BTC in the protocol level, BTC is still denoted in fractions and that will likely be the case. It doesn't make sense for the client to have to recalculate the entire blockchain again and convert everything to BTC. It is definitely possible for websites and various wallet client to represent the BTC in smaller units but the protocol shouldn't be changed.
It's not so much that it shouldn't be changed, but rather that it's highly unlikely that it will be changed, even if it should be.
I keep coming back to the idea that in the future, we'll end up using satoshis as a unit of reference to Bitcoin, rather than "bitcoin" itself, as the value of BTC keeps increasing. I do firmly believe that, within my lifetime, 1 Satoshi will actually be worth at least 1 cent. Imagine that... Paying 350 Satoshi for a cup of coffee.
Other than that, I honestly don't think that measurement units like mBTC or uBTC or bits will ever catch on. I think it will always just follow the naming protocol of Bitcoin and Satoshi.