Because it tends to be shitty and lose what made the original actually fun and interesting? Janky CGI is really offputting to watch, so unless its done for comedic effect it tends to not go over well.
Sadly, what you want is actually kinda happening. They're doing live-action remakes of a bunch of animated stuff. There's the Disney ones, Netflix had Death Note, and I think a Cowboy Bebop one was just announced not long ago. Which, I don't think that's quite what you're actually referring to, and I've wondered why we don't get movies made using game engines but I think the tech just hasn't been there quite yet to make it effective. You'd need a team of animators, or you'd have to do a lot of tedious stuff yourself, which would be very time consuming and your finished product would likely at best serve as a portfolio piece when applying for work in that field.
There are some Resident Evil movies that seems to be what you're wanting (no, not the Milla Jovovich ones). And there's been several others based on games that use cheap CGI that is similar to game cutscenes.