Barrier to entry - Right now, the majority of crypto games require you spend money upfront by purchasing a game specific token on a crypto currencies exchange. If you've never done it before, it’s hard to figure out how to buy the crypto required to start playing. It is quite a complicated technical process which serves as a huge barrier to entry for people who aren’t already crypto enthusiasts.
The cost to start playing most games is ridiculously high. Some games require you to spend hundred of dollars upfront in order to start playing (i.e. Axie Infinity - the most popular blockchain game). That kind of price will put most people off even looking at the game. The majority of the planet simply can't afford it.
Games based on trading NFTs - the NFTs start off cheap and quickly escalate to prices that the average person can’t afford or is off-puttingly high. The design expects the price to keep rising until the last person is left holding the NFT. This is quite ponzi scheme like.
Finding an audience - blockchain games are very niche because of the barriers to entry. Many games also struggle to appear on the App Store due to the rules the developer must comply with. In particular, circumventing Apple’s payment system to sell in-game currencies will prevent you appearing on the App Store.
Reputation - Steam recently banned all crypto related games from it's store after a backlash from it's audience. Many view the space as full of scams, get-rich-quick schemes, rug pulls and ponzi schemes, while at the same time being bad for the planet (due to the proof-of-work consensus that Bitcoin uses).
Low quality - the vast majority of blockchain games are poorly made compared with modern PC and mobile games. The developers tend to come from a blockchain background rather than a games industry background. The overall user experience is terrible and the mechanics can be difficult to understand and aren’t much fun once you figure them out.
Play-to-earn - are people having fun or is it a job they do just for the money? To date, only Axie Infinity has made it possible for people in low income countries to make a living wage from playing. However, the price of the token is volatile and has already crashed down to a price that is less than minimum wage (in developing countries).
Inequality, capitalism, early adopters - In many blockchain games simply being one of the first players and buying up NFTs cheaply gives you an unfair advantage over later players. In games where you use real money to buy things, it’s fair to say that a rich person has a massive advantage over a poor person. That money wasn’t made fairly in the game. Games become a reflection of the outside world where the rich are the privileged and the poor are left to suffer. It amplifies capitalism and its flaws. Some blockchain games allow you to rent characters/land from rich players. Where’s the fun in that?