chocobo racing has a few problems:

first it's extremely grind and RNG heavy to breed better racing birds. people seem to not like that.

and there are far too many race classes. depending of the strenght of your bird you are placed either in R20, R40, R60, R80, R100, R120, R140, R160, R180, R200, R220, R240 or R300 class. it's not very likely that your friends are in the same class like you. even when you start out together, the one of you wich wins more often will get mehr exp for his bird, wich means he levels faster and will be soon in a higher race class than the other one. and then there is the breeding. it's RNG based wich stats your new breed will have. means again the friend with the better stats will be in a higher race class, so you can't race together.
so even when there are 8 people in the same FC who want to race togehter: they simply can't. so before you can race with your friends you all have to grind the chocobo to R300, wich will take a while, and only a few hardcore gamer have the time and energy to do so...

and of course: the lack of an awesome reward. sure, after some rebalancing chocobo racing is the fastest way to grind MGP. but first you have to grind your chocobo to R300. then you can grind MGP. well... grinding is the reward for grinding? not thaaat a popular reward xD with the weekly challange log you will get enough MGP anyway, and bringing a chocobo to R300 costs a few 100k MGP before you can start grinding MGP... o.@
then there is the chocobo mask and a barding. oh, and 1 or 2 titles, that's it.