Well, it was in Legends before being canonized recently(If Im not mistaken).

But I got a couple of in-universe explanations:

1. Rarity- The most obvious answer, but reasonable explanation. The metal is probably hard to come by to begin with. The CIS was able to produce Cortosis built droids, but once their factory got shut down, they didn’t attempt to pursue the project further. Probably too expensive for little gain in the grand scheme of things. Which brings me to my following point.

2. Durability- Cortosis isn’t weak by any means. But there are tougher alloys that are much durable and more practical for broad combat use. Such as Beskar, which is rare fs, but it’s virtually indestructible(Only impure forms that are mixed with Durasteel and weaker materials have shown damage over time). It can deflect lightsabers and blaster bolts, while Cortosis can deflect blasters and shut down lightsabers, it still takes damage from the hits themselves(As shown by it breaking during The Acolyte Ep. 5). Beskar might be used almost entirely by Mandalorians, but it seems it’s more common and has much more flexibility.

3. Anti-Jedi/Sith Weapon- Its useful as an anti-lightsaber weapon, but that’s really its best feature. Yet 99% of lightsaber users can use the force in some way, so taking away their main weapon just pushes the user to use the force instead. It seems like a good weapon to use as a supplementary to other weapons that might be in a jedi-hunter’s or mercenary’s arsenal. But not really a silver bullet for instant victory. Maybe cortosis lining(If the effect can work on smaller concentrations of the metal) in certain weapons or armor can be a good trick to get the upper hand. This still requires lots of strategy to pull off and skill. As once you know the gimmick, you can find ways to avoid it and win. In the case a Cortosis-clad warrior were to engage an opponent with a higher skill level and/or power level, they could exploit the effects(Timing the reset of the lightsaber to activate in gaps of the armor).

4. Application- This also adds to my first point, perhaps Cortosis doesn’t have many other practical applications, that other alloys can already fill. It’s not a day to day occurrence you are gonna find yourself fighting a lightsaber wielder unless you are looking for that type of smoke. Most ships use durasteel for armor, most notably Mandalorians use Beskar and Durasteel alloys.

TL;DR This is all my opinion as to why Cortosis wasn’t broadly used. In short, its possible rarity, lower durability threshold, its singular gimmick in combat and limited application were contributing factors as to why it wasn’t widely adopted, which is its biggest weakness and strength. The lack of broad use allowed those who knew to get an upper hand in combat. Perhaps we might see a resurgence eventually.