Because it's not worth mucking with the social linguistic dynamics of naming for such a mild aspersion. It introduces considerable social friction (term-policing) in order to avoid minor social friction (a possible unintentional slight). It's not even an implication of a defect in the case of Gen X/Z: just that nothing stands out as such a clear characteristic to be worth using that as the name.

If people take whatever term is there and then layer age prejudice on top of it, that's a problem with prejudice, not the name. (I don't think antisemitism will go away if we relabel Jews "Israelites" or "Gilextians" or anything else.)

If we actually stop labeling generations then maybe there would be a bit of an effect. It's a bit harder to maintain prejudice against something you can't even talk about. But if people are motivated, you'll just get new slang so people can talk about the object of prejudice; and if they're not motivated, the prejudice probably wasn't bad enough to worry about much anyway.