It was too expensive.
I think Wookieepedia explains it, the fact that it was rare and very expensive to make.
Earlier it seems that it was fairly abundant. Cortosis weave was in
use as early as 4000 BBY as both an armor underlay and for the
tempering of traditional melee weapons against lightsabers. At this
time cortosis ore seemed to be much more common
But, became rarer,
later, however it would become a rarer, more valuable material that
would give the user an unexpected edge against a force-sensitive
opponent.
Also around the same time of the Clone Wars, cortosis shot were used, but that also states that they were very expensive.
used by Cad Bane in 21 BBY.
However, Bane stated that the bullets were expensive and hard on the
slugthrower's barrel
So I think the general consensus is that it was just too expensive and rare to be mass produced by the time Clone Wars came around.
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