Relative lack of residential population combined with inertia: when the city and Pyramid were developing Franklin Square, private development in the Armory was just getting some momentum. Planners realized that a small city's urban renaissance wouldn't support a second retail district so close to the Armory, so they actively sought to limit the land use in Franklin Square to office and some residential.
It was the right move at the time, but it's obviously robbed Franklin Square of some vitality today.