For starters, they don't invest any money into their DNS.  They have to have dns servers in order to run their businesses.  They setup the minimum amount of servers and architecture they can to get the job done.  In today's world, that's not enough.  There are so many companies using the Internet these days and most of their end users are global.  However, hosting companies typically setup a handful of name servers in 1 or 2 locations which causes latency.  Its common sense, you should require your customers in Europe, to resolve a dns request to your site on servers that sit in the US. 

They also typically run BIND and don't stay up to date on patches and upgrades.  There are so many security vulnerabilities out there today, you can't be sure you're covered.  The amount of ddos attacks out there today, they just don't have the bandwidth on their dns to support it.

Hosting companies don't provide you with much, if any, control over your domains.  If you need to make a change to a record or IP Address, you have to submit a ticket to your hosting company which can take 24-48 hours just to get done.  What if that change is very important to your business and you need to make that change on the fly.  No can do.

If you stay on top of the news, you'll probably have noticed that companies like GoDaddy, Network Solutions, Register.com, and many many more, have had outages on their DNS network.  Unacceptable.