Because it’s not difficult to beat the S&P 500. It’s more of a function of personality rather than IQ. If you can pick 4-5 solid companies you will beat the S&P 500 which is filled with average and below average companies. Just a quick example all the stocks in FAANG increased anywhere from 7-13x in value over the past 10 years whereas the S&P 500 only increased in value by 2x.
Now this is just one example. But if you replace those 5 companies with Costco, Walmart, McDonald, JNJ, and Berkshire you’ll get the similar results
Where people fail is that they let their emotions make decisions for them or they’ll only hold for the short-medium term. Hence why you see a lot of bitter people who bought AMD for $20 and sold at $35. Buying and holding the S&P 500 until retirement is likely to beat these people. Buying and holding only solid companies is likely to beat ETF holders.