Because despite Wikipedia and sister projects being one of the largest web property, it is running on a thin budget and has starved engineering resources. As far as I know, the transcode code is maintained by a single employee (possibly as a side gig / on top of everything else) and the assistance of a volunteer.
For Motion JPEG a recent config change ( https://gerrit.wikimedia.org/r/c/operations/mediawiki-config... ) indicates:
> Recent versions of iOS can play back suitably packaged VP9 video and Opus or MP3 audio, with a Motion-JPEG low-res fallback for older devices.
So I guess it is there for back compatibility :)