It’s the complete unpredictability that devs and businesses hate. 2% of every purchase they can plan for, but with install fees they could get randomly billed for copies that were already sold, and that is unacceptable. This isn’t a one time fee, whenever somebody installs the game on a new device, the dev gets charged. Not to mention the fact that some people might have multiple devices, but randomly in 3 years they could get a new PC and suddenly the dev gets charged again, all the while the dev didn’t make anymore money from that copy. Who the heck would agree to a system like that?
Not to mention that if a game gets added to a service like GamePass, then the service gets the bill. No way Microsoft would say yes to that, which means the Dev misses out on deals that could’ve made them a bunch of money.