Because it is a clusterfuck to combine alot of world with different backstory together. It creates confusion, in RPG you are supposed to team up with other player under one single goal. Now let's say you have alot of worlds, how are you going to make sure one or the other villain/heroine is not inferior/superior to each other because this issue will indeed raises up silly arguments amongst fanboy.

This was also why Dissidia takes on entirely different world with two new villain/heroin, Chaos and the other goddess which i forgot the name, everyone knew Chaos is the main enemy. It wasn't Kefka, wasn't Sephiroth, etc.

Even by doing that, the storyline at dissidia is still pretty much crap and was shunned completely, RPG is known for their storyline, scrap that away and it will not end well.