Because, similar to collections of free web graphics, collections of MIDIs are widely available. Due to their quality and mostly fan based production MIDIs are generally considered free to collect, use and share. Audio files never made it to this status, they're clearly the intruders from a world outside of the web. They come from CDs and the radio while MIDI gives the impression that the web is its natural environment.
But MIDI collections differ from graphics collections: supply exceeds demand. There isn't the same tradition of composing music for a web page as there is for GIF images. Instead, popular songs are adapted to this format. A MIDI file is usually considered of good quality if the adaptation gave a somewhat faithful reproduction of the original, given the limitations of the format.
This means that you can't identify web music by genres or styles that "came from the web" but by the way it sounds and, although it sounds different on every system its played on, it will always sound trashy.
How did it happen?
The MIDI standard was originally created in 1983 to allow data exchange between electronic instruments like synthesizers and samplers. It featured 128 standardized instruments (like a grand piano, steel guitar plus a drum kit), each assigned a fixed ID number.
So a defined instrumental palette is part of the standard. A MIDI file itself does not contain the exact recording of a sound. It only describes what instrument should play a certain note at a certain time. How it actually sounds depends on the synthesizer. In the case of web music a sound card or a software synthesizer, like Apple's Quicktime, is in charge of replaying the tune. It can be compared to the way HTML describes how a web page should look and leaves it up to the browser to render these instructions.
As all the instruments were standardized in 1983 the sound effectively goes no further than Italo Disco. There will never be any new and exciting sounds, only updated versions of old sounds. New sounds would only break the compatibility with all the existing MIDI files. Software vendors can't change the "trumpet" to a "Neptune's kinda honkashizzle" because, on the web, you can find all kinds of MIDI files that use the trumpet in many different ways. In this case the only solution is the lowest common denominator. The trumpet sound must fit into James Brown's "Sex Machine" in the same way it fits into "Ride of the Valkyries" by Richard Wagner. It does this by not really fitting into either. At least that's equality.
The result is that most of the time MIDI files give the impression of somebody playing hit music on an electronic organ in the privacy of their own home. In reality this happens at village weddings or the annual gathering of a rabbit breeder's association.
It's hard to imagine an easier target for usability experts. It was found that MIDI was distracting and considered annoying by most users, especially if they were listening to a CD while browsing the web.
Only very rare MIDI files were composed especially for web sites. Michael Samyn, author of legendary Home for Netscape1.1, wrote minimalistic tracks for various websites in 1997 and 1998.
Quite recently in the end of 2003 the "Zombie and Mummy Theme" for the online comic of the same name was produced.
It's a great melody and also sounds good because the author took the challenge to fit the tune into the possibilities that MIDI offers. It's a "classical" melodic composition without effects and all the instruments were chosen by their name, not by their sound. If a "xylophone" is needed it's wise to select the "xylophone" even if the "marimba" might sound more like a "xylophone" right now. The tune was then tested on many different platforms and adjusted accordingly, just as is done with HTML code. This insight came a bit late however.
At the moment, the new fashionable browser Firefox doesn't play MIDI on Windows at all. Background music isn't considered to be valuable enough for the developers to fix this bug with the priority it deserves. So MIDI seems to have no chance of survival in the third millennium unless somebody feels that special satisfaction when the sound card tries hard to reproduce a touching passage in a Brian Adams song.