Because it's a smaller club, the level of training would at a lesser standard (even you should agree with that), the level of competition at training would be worse, the level of competition for spots would be worse, the overall morale of the player would be worse considering he knows his future might not reside there, the loaned player is not guaranteed a spot in the team, the loaned player has no chemistry with his new mates, et cetera.
This doesn't even include the fact that extra pressure is placed on the player to perform in a side he is not accustomed to. Whether you agree with that point doesn't really matter, as common sense and human psychology demonstrates that putting a spotlight on a person in unfamiliar surroundings is not a good idea. But suit yourself. You cherish one important facet of development over several others grouped together, so I can't possibly agree with that.