Truly dynamic agents existed in Rollercoaster Tycoon, where every single person that walked into your theme park would have Nausia ratings, money, and make individual decisions at every point in the game. G-force was measured on every ride, and would effect different people in different ways. The amount of vomit in front of rides would disgust people in differing amounts. Etc. etc.
True AIs, agent theory and dynamic games were the norm in the mid-to-late 90s. But this approach to gaming isn't what people want. The truth of the matter, is that what makes money are these pre-scripted game-movies that sorta-kinda look photorealistic.
In fact, true-AIs have been implemented in games by probably every game development team. When AIs fear for their own life and run away from players (instead of standing and fighting), players tend to get bored. When AIs become so good at the game that they crush the player, players become frustrated and quit.
Believe it or not, few people are willing to put up with realistic and dynamic challenges. There are no game guides, no assistance, no "help menu" when a game is created dynamically. It is hard to share experiences with friends, because everyone is sort-of playing a different game.