Number one reason is the regulation in the crypto space. Aside from Bitcoin other currencies are bound to be regulated by owners or developers. There is trust issues in keeping their funds in an altcoin for a long term. The only ATM that has managed to work is the Bitcoin ATM. I think El Salvador and Japan has at least one Bitcoin ATM.

Another reason is privacy and security. It seems crypto ATMs are less private. Your crypto card might be hacked or stolen, so many security reasons attached to why it wont work.