Because it means you need to be making more than $3.3-$1.5 per user per year to break even on this, which is difficult
Perhaps this is the case inside the App Store, but it's not the case outside the App Store, where indie apps tend to be higher priced and upfront paid.
Moreover, keep in mind that the first million first annual installs have no CTF, and most indie devs will never even reach that point.
If this is the case, this is an even worse deal, due to the annual install fee. If it was one time, it wouldn't be so bad.
In any case, though, it's only 5 euros for 10 years of installs, and many indie apps have paid upgrades (which don't exist in the App Store) at least once every 5 years.