There are quite a lot: too many pump and dumps coins, project developers only out to reincarnate unsuccessful use cases for their coins, the ico doom and i can also add the fact many other forms of fundraising that came after, e.g ieo, didn't do better than their predecessors. I'm sure there are more reasons than this, but all of them have created the mindset in investors that altcoins are just as fake as a three-dollar bill, hence no need for diversification.