Because, honestly, I have not found the performance hit to be anything noticeable. Oh, I'm sure it is there, but it just doesn't seem to have a big enough effect for me to worry about.
Also, simply dumping everything on a single encrypted volume makes the whole process easier. The single LUKS volume is entirely used as a single physical volume for a LVM volume group. On that VG I then create root, usr, home, etc.
In the past I have tried other methods, such as encrypting home only. Ubuntu (I think it still supports this) even allows for per user encrypted home directories. I tried this once, but it seemed kludgy and it even broke simple things like 'du' (which would always report 0 blocks used).
This method has also been the most user friendly, at least in my experience. I get prompted once at boot to enter the passphrase and that's it. Previously I had to roll my own solution when I wanted to encrypt only home. Maybe it's better now, but this has always been easier.
On my file server, where I also use this setup, I have running a whole host of processes and daemons. Included among this is MythTV and that certainly generates a substantial amount of disk I/O. Not only that, but I have root-on-lvm-on-RAID5-on-encryption on this system and it still performs quite admirably. Of course I'm sacrificing some disk and CPU performance here, but it hasn't been enough to make me look for a different/better solution.
And, as I mentioned in my original post, both the Debian and Ubuntu installers support setting up your disk in this manner so that simplifies things even further.