Most of team member of ICO was fraud, always intend to scam. Since they have used fake identity, the chances was high to scam people. As a result, people were not motivated to invest in ICO, not even in a legit project because they don't know which one is legit and not.
On the other hand, IEO is being held on exchange platform. The team member procedure the KYC too, the chance of scamming is very lower. On behalf of you, reputed exchange do the research as well.
Investors get attracted, project get fund.
That's the basic different between ICO and IEO.