Because of the cost. It 'could' be done, but it would be very expensive, and time consuming. It would probably not cost as much as buying a Mk4 2.5T, which is a far better car than a converted Mk3 ever would be.

£6k gets you a low mileage 2.5 Mk4

I'm all for people coming up with something new, but it's just not a conversion that makes sense.