I can only speculate, but here's a few of the issues I have with them:

  * No incentive to see anything through, since there's always a "next idea"
  * Lack of vision. Most of the good startups have someone with a general vision, which is impossible this way.
  * Harder to recruit people since there's no core idea to get behind
  * Since the only way these are funded is by a rich person (after all, no VC would ever invest in one), it's susceptible to the whims of said rich person.
  * What happens if something becomes successful? How does equity/spinning out/etc work? And, if it spins out... all the revenue for the "factor" dries up.

There's a lot more, I'm sure.