Because it gave an advantage to market makers and large institutional traders. I can look for some of the research if you are interested...
This is from the SEC at the time:
http://www.sec.gov/news/testimony/ts092000.htm
It should be a good starting point if you are interested. There was also a NYT article that was very succinct but I can not find the citation at the moment.
EDIT:
I'm at a loss for why this was downvoted. Decimalization is widely held to be a huge win for consumers. It's almost laughable to think otherwise.
From the NYT:
"There is a potential for investors to save hundreds of millions of dollars, but some of those savings are likely to be offset by increased commissions. Brokers have made substantial profits by pocketing the spread, and in some cases have been able to charge low commissions -- or, in extreme cases, no commissions -- on trades in stocks with large spreads, because of those profits.
It was the discovery that brokers in the Nasdaq market had been conspiring to keep spreads high on many stocks that began the inexorable move toward decimalization. The Securities and Exchange Commission imposed new rules last year that partly integrated electronic markets, like Instinet, that were previously available only to institutional investors, into Nasdaq. Suddenly, quotes with spreads of less than one-eighth were available." [1]
[1] http://www.nytimes.com/1997/06/06/business/so-long-fractions...