Because at the end of the day, Terri Minsky, Hilary Duff, and Disney (https://wdwnt.com/2021/01/lizzie-mcguire-disney-reboot-cast-blames-disney-executives-for-cancellation/) weren't going to compromise. Terri Minsky was apparently, fired because her take on a Lizzie Maguire revival wasn't "family friendly" enough for the Disney brand. It was always going to be difficult to have a kids show like Lizzie McGuire become a show aimed at an older audience with mature themes like sex and cheating.

So you would likely have a show where you don't know who it's supposed to be marketed for. Going from a show that was aimed for the younger audience into a show aimed for only an older demographic (even if they watched the original show as youngsters themselves) would probably be too much of a stretch. Hilary Duff wanted Disney to move the show to Hulu, where they already have the Disney-owned "more adult" content, and they also wouldn't do that.