Why use FLAC instead of other codecs that compress more?
For most users, a small difference in filesize is usually far outweighed by FLAC’s advantages: open patent free codec, portable open source (BSD) reference implementation, documented API, multi-platform support, hardware support, multi-channel support, etc. Improving FLAC to get a little more compression is not worth making it more complex and more compute-intensive to decode, and hence, less likely to be supported in hardware.