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Because it just opens up a huge can of worms.
Having actual hand painted art in the game would stick out like a sore thumb, unless the entire interface and graphics package was redone in a very high-resolution style. That is a massive job. The resolution usable in RPGmaker is higher than Gen 3, but not high enough to not read as pixel art.
Getting to the artwork itself, sourcing all of the images in good quality with clean colors is a huge challenge, and while the images are all roughly drawn to the same size, the Pokemon sprites are not - so for example the Caterpie image is gonna be smaller than the Butterfree image, meaning all of the lines are going to be thinner on Caterpie. There would be extensive redrawing that comes with it to make it all work.
