The answer is very simple:
Because it has an horrible end user experience and it’s highly unusable.

20 days after it’s launch and about 10 months of development is still highly unusable, and after trying it for 2 days, most people will go horrified to their original phone OS.
I don’t know what motivated Canonical to release something at this state to the market. Maybe it’s because developers need an early release to get familiar with the framework and because some awkward marketing strategy.
But seriously, why on earth would you launch with bells and whistles an OS to replace Android that has such a limited Usability ?
I’m not talking about advanced capabilities like Gmail synchronization or advanced apps. I’m referencing to normal features that you expect in a Phone. Basic things like:

• “Unlock SIM”
  Currently hidden into a very hard to navigate menu that lists all the Wifi’s. So to unlock the phone you need to scroll way down.
• Unresponsive tapping
  Tapping is highly unresponsive in many Apps including the browser
• A browser that does not work at all like a browser
  Javascript links mainly don’t work. Maps like google maps render horrible. Video & youtube is mostly not supported
• No working alarm
  This was reported like 6 months ago. Is still not working at the moment of writing this. So you can forget to wake up with the phone
• An unusable keyboard
  With no working predictive text and quite an annoying usability. Way below the standard usability level in your previous OS
  

Interface

This is the interface features that I read here.
Ubuntu Touch is a gesture heavy interface that makes full use of the screen for navigation:

• Swiping in from the left reveals a launcher housing pinned and running apps for swift multi-tasking.
• A long swipe in from the left reveals the home screen.
• Swiping in from the right cycles through open apps.
• Swiping down from the top gives access to indicators and settings.
• A small swipe up from the bottom in an app reveals a toolbar.
• A long swipe up from the bottom reveals the HUD button.

This is a nice concept. But it’s horrible deployed and collapses all the time, is highly unusable. Basic things like keyboard get’s over the sliding menu.  Again, UX design is specially hard on devices, but this is to say the most not navigable. It cannot take so many steps to see a list of opened apps as you see with one click in the Android windows button.

But what is most annoying  of all this UI, is simple that they removed the usual Back, Home, Windows footer. It would be nice if they remove it making a hole new concept to do the same. But it must be usable, logical, easy to navigate.

This was my humble contribution to the top 5 most needed things for an usable phone:
____________________________________________

1. A fully working Keyboard
   I even don’t care too much at predictive right now. A keyboard that is fast, elegant, usable. No need to repair bugs on this one, it simply does not make it like this. It’s not a good design for a phone.
2. A screen tapping that is responsive
   This is the worst usability point I see on this OS. It takes sometimes up to two seconds to respond to a simple tap on the screen.
3. A clock that works right after install
   One that gets the right time from the start, at least if you are connected to internet. Here in Germany I always get an hour less and I have to set it up in system preferences. The Alarm does not work and most people I know use the phone as an alarm clock.
4. A browser that works
   This one is quite important too. The current one works, but is way out of a normal standard usability. Is not responsive, renders inefficiently, maps flicker and most of the links that are javascript based simply don’t work.
5. The whole navigation concept must be re-thinked
   I don’t dislike the left menu. But the whole navigation concept is just not intuitive enough. It’s hard to find the new apps. It’s hard to get the flip to the left thing to scroll in open Apps. And they are a lot of incompetencies that just collapse, like keyboard with menu, flipping the phone and getting a totally static keyboard that does not work. It’s like if the whole thing was not tested by real humans.
   And I know that is fucking hard to make an OS for a phone. And I respect all the hard work that has been put into this one.
   But at this point I’m not at all convinced with it. Don’t make a phone for Linux experts, make a phone for normal people.
   ___________________________________________

This are just some things I also tried to say when I joined the list. Is like if the whole system was not tested by real humans. It’s sad but is like this, if you don’t believe it, go to their install page and try it out.

So that’s my resume of the actual state.
I use Ubuntu desktop since more than 6 years and I consider it highly stable and operational. The kind of OS that you install and you never have to touch again. As a developer, this is what I need to work, since Windows is also highly unusable with all their stupid automatic updates and slowness.

After this rant I hope for the good that all this changes in 2014 and we can enjoy a new OS that can be a serious contender of Android.