Because it fails to satisfy so many modern demands. It doesn't even understand user names that aren't a subset of ASCII. Most of the commands aren't really standardized. It doesn't support end-to-end encryption (which today even WhatsApp is using). It requires you to be always connected instead of using push notification systems which are way better for the battery of mobile devices.
Probably the only reason the protocol is still around is that it's popular among a certain group. IRC is so different from what you would want from a modern chat system that it doesn't make much sense to build upon it.
True enough, but rather than "doesn't support" end-to-end encryption, it doesn't standardize it. You can slap OTR on pretty much any messaging protocol. Client support is a problem though.
Probably the only reason the protocol is still around is that it's popular among a certain group. IRC is so different from what you would want from a modern chat system that it doesn't make much sense to build upon it.