In 99% cases of "Why wasn't this (better) format adopted?" the answer is:

* It's not actually better.

* It's patented/requires license/is owned by someone who wants a lot of royalties.

JPEG2000 is of the second variety.

Orthogonal, but one fun thing about JPEG 2000 is that when you watch a movie at movie theatres now, odds are overwhelming that you are watching a sequence of JPEG 2000 encoded images.

Multiple reasons, while technically better and more benign compression artifacts, it is computationally more expensive, limited quality improvements, encumbered by patents, poor Metadata format, poor colorspace support... In the end, the benefits aren't great enough compared to jpeg to change the default format

IIRC JPEG2000 was never supported by any browser other than Safari, and even Safari recently gave up and removed support (around the same time they added support for JPEG XL). As to why other browsers never supported it, I'm not sure.

JPEG 2000 used to be a patent minefield.

Greed. Wavelets used to be heavily patented.