The question is never about why something doesn't exist - it's about if it can be made to exist. I.e. how can we get from here to there. Economy is a dynamic system; for coops to thrive, they not only must be good coops, but also better or equivalent to regular companies, in order to survive on the market.

I'd rephrase your question as: under what conditions can coops survive and thrive among regular businesses? After figuring those out, the next question is: how do we get from here to there? I.e. is there any way we can nudge the market, be it bottom-up or top-down, towards that future?