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It all comes down to laziness.
"Adding every pokemon is unrealistic."
Its unrealistic because, in order to accommodate all these pokemo., you have to create more expansive worlds and environments to put them in. Take any of Monolith's games...all 800 pokemon would easily be able to fit, because their worlds are large, expansive and grandeu.
Gamefreak would also have to make their worlds large, expansive and grandeu. They dont want to... because none if their employees have soul. Monolith has soul. Enix has soul. Ganefreak... does not have soul.