Because that existing "online market place for funds" is gibberish to most retail customers.
You go to Amazon, you type in "best AA batteries", and what you get back is not a raw list of battery serial numbers or technical specifications about battery performance (which is basically what you get in the existing brokerage experience, describing funds and their performance). What you get on Amazon is plain-english descriptions, reviews and ratings, and a sorted order of relevance or price or whatever. All these things smooth out the buying experience, reducing any possible source of friction for your purchase decision (hell, you can subscribe-and-save for new batteries every 6 months, thereby precluding ever having to make a purchase decision ever again); they want to make it as easy and natural and automatic as possible, for you to click Buy. But for investments, customers face a huge upfront barrier in terms of lack of knowledge and uncertainty, before they can make a purchasing decision; sure, all the raw information is there, but only highly motivated customers (relatively speaking) are going to dig through it or overcome it before transacting.
Now, I'm not saying that Amazon should add customer reviews of ETFs or funds or whatever ("5 stars: I bought VTSAX and made $43.26, and you can too!"), but it can certainly do a whole heck of a lot to reduce the friction of making a transaction. The point is, the customer shouldn't have to do any work (or as little as humanly possible), before clicking the Buy/Sell button.
And sure, the existing financial institutions can work on this same problem, but this is a actually not their biggest problem. Their biggest problem, is convincing customers to even think about them and take a look at their offerings, in the first place. 70+% of American households have Prime; how many have brokerage accounts? Some Googling around puts this at ~14% ([1] DOL 2015 report says 17 million households had brokerage accounts in 2013, DOWN from 19 million in 2001; total there's roughly 120 million total households in America). Also remember, this 14% of households is split amongst all the competing brokerage firms, while the 70% of households is ALL Amazon's.
All the brokerage ads I see, are targeted towards traders or people who want to become traders; this makes sense for those firms, because why would someone who has no interest in trading, ever use their brokerage? But this is narrow-minded and ultimately self-limiting thinking, and this is not at all how Amazon thinks. EVERYONE is an Amazon customer (or potential customer); once you're on the platform, figuring out exactly what to sell and how to sell it to you is easy. Prime is a huge economic engine/pool of consumers, at which Amazon could throw just about any product at, at any time. Some will stick, some will fail, but even those that fail can be recycled and improved and retried.
Everyone else is fighting over their shares of gold, while Amazon is working to create/feed the golden goose instead. Strategy over tactics.
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[1] https://www.dol.gov/sites/default/files/ebsa/researchers/ana...