I believe this is due to several factors, perhaps the most prominent of which are privacy-related issues and high fees, which have led to insufficient demand for these devices among users, as many prefer to use online trading platforms. Privacy doesn't just mean completing secure transactions and protecting personal data from any suspicious use; it also entails the potential legislative restrictions that could enable authorities to monitor citizens' financial activities. This has led many to avoid using Bitcoin ATMs, even if they are available to them.
Another reason I find important is the rapid technological development, which means a large number of ATMs quickly find themselves outdated and in need of structural updates to keep up. Consequently, operators of these types of ATMs will find that operating costs are disproportionate to market demand, making them a poor investment.