Exercise makes your hungry, so it is particularly hard to eat less when exercising more. So it doesn't work for most people, because they aren't able to to both.

http://well.blogs.nytimes.com/2016/11/28/why-do-i-gain-weigh...

The problem, most scientists agree, is that exercise makes us want to eat. Many studies have shown that if people start a new exercise program, their bodies begin to pump out much higher levels of various hormones that increase appetite. This reaction seems to be most pronounced if someone starts a new, moderate, aerobic exercise routine. (There are hints in some studies that intense exercise, such as interval training, may dampen appetite. But the relevant studies have been few and small.)

'eat less' is not the same as 'eating a balanced diet'. There's plenty of people out there who eat a small but terrible diet. I knew a guy in IT once who lived on a diet of basically chips and Coke. He was rail-thin, but his doctor diagnosed him with scurvy (!)

Well, I am assuming people eat normal food. Like, you know, bread, cheese, eggs, meat, tomatoes and potatoes... Who the hell lives on chips and Coke...

"Who the hell lives on chips and Coke.."

Half the developed world it seems.