Because it is horribly economical.
With the exception of solar cells every major energy source used for electricity generation benefits greatly from economies of scale. As an example, the cost of building wind-turbines scale approximately linearly with their size (up to a point ), but the power generated increases as the square of the turbine radius, and with the third power of wind speed. As a consequence you want to build them big, you want to build them where wind conditions are the best, and you want to make them tall. The most economical wind turbines are quite large, and those little toys you see people put on their roof is a complete joke.
For nuclear power the maximum possible output of the reactor is largely dependent on the capacity of the cooling and safety systems. Since fuel costs are only a small part of the electricity cost, most of the cost is construction and operation of the plant. Since cooling capacity is related to volume ( how much coolant passes through the pipes ) it scales rapidly with reactor size, making larger reactors more economical ( the cooling capacity increases more rapidly with size than does material costs ). The limit in size is mostly determined by what can safely be built, transported and operated.
Now, there is one way distributed generation could become economical. If many small power generators could be mass produced, then one could take advantage of economies of volume. This works well for things where energy production scales at about the same rate as material costs. Solar cells would be a good example. The energy they produce is proportional to the surface area of the cells, and the cost of the cells is also proportional to the area. Thus if mass-production allows for reduced manufacturing costs per area of cell, it helps the economics.
I still think solar power would be more economical built to scale however, because the amount of electronics needed match the energy produced to the grid would then be much smaller per area of cells. Furthermore, roof-top solar cells are frequently poorly aligned and maintained. A larger facility could afford tracking devices and professional cleaning and maintenance, which increases the efficiency dramatically.