Two reasons I can think of:
First, the focus of the reservation process is booking the trip, and so the location of your seat is secondary to that. It may be important to you and many others, but it is not the primary factor for most (the two most important ones are schedule and price). You’ll notice, however, that in some instances the location of the seat has a cost associated with it (first class vs. coach) and in those cases user DO “pick their seat” – just not the exact one. The same process is applied with concert or sports tickets, in that you usually select a “preferred” ticket zone (and all the zones have different pricing).
Picking a seat is also a challenge to do in “real time” if you allow anyone to do it at any point in the reservation process – if it’s open to play with then seats will have to be held and then released if the customer doesn’t commit to buying the ticket (and there are high abandon rates in all reservation systems) – which raises the risk of NOT selling a seat on a flight that is not really “sold out” (it just has a lot of seats on “temporary hold”).