Because it would not catch mainstream people. No "cool" kid in the school would play unpopular games. And most popular games are AAA, yes there are quite a few indie gems - minecraft, angry birds, plants & zombies - but only few of them can keep them attached for many sequels.

Where Mario, Donkey Kong, Final Fantasy, Grand Theft Auto, Gran Turismo, and many others are games where kids expect them and know about them. These are AAA titles. This is what sells a console.