The prevailing belief among Hollywood producers and casual film fans is that practical effects, while cool and fun in the "we like old-timey moviemaking" sense, just aren't as versatile as CGI. Prosthetics and puppets look good in close-ups, but when you need them to move dynamically or crash mightily through a building, there's no competing with what computer effects can do. You can create entire worlds with freaking green screens (see Avatar, The Hobbit, George Lucas' fever dreams, etc.). Meanwhile, practical effects got left in the dust back when Jurassic Park came out and proved we didn't need them anymore.
The truth is that practical effects have been steadily improving over the past 20 years, just like digital effects -- they just don't get used. The kinds of prosthetics and monster costumes being made today are so advanced, audiences from 1993 would probably have mistaken them for CGI and/or witchcraft. The problem is, Hollywood has spent the past two decades forgetting what it was like when you couldn't just go back in post-production and add giant dewback lizards to whatever scene you wanted. Practical effects aren't sexy anymore, and that mentality is hurting the development of the art that movies used to depend so much on. For example, check all the awesome shit Gillis and Woodruff made for 2011's prequel to The Thing: