I haven't tried pair programming except in very ad-hoc situations, but doing it all the time sounds utterly exhausting. You're taking programming, then layering on top of it a level of constant social interaction over it, and removing the autonomy to just zone out a bit when you need to (to manage stress).
Basically, it sounds like turning programming into an all-day meeting.
So I think it's probably unpopular because most software engineers don't have the personalty to enjoy or even tolerate that environment.