Because regen is overpowered and it wouldn't give you any benefit if the bandage got hit again. You can't check 'on hit' on a player, so it would have to be scripted onto weapons, which equals scripts per hit, per player, per weapon and per monster, and spell... So lots of lag.
not to mention, regeneration is hardly realistic and is the single most irritating thing to deal with in events. 90% of people who get hit by something and suffer damage via the damage wand are like "amg det hurt" *Da wuund bgin 2 clz as hr regen itenz wrk* even if its an incorporeal wound dealing cold damage to the lungs, which wouldn't 'damage' persay. More, make you feel like you swallowed the arctic and be effing uncomfortable. Or, if you got set on fire, the regen and the fire damage would counter each other out, and you'd be in a truck of pain. "auch, mai nerves are burning off but repairing themselves at the same time, amg!" -- but i've never seen that RP'd unless told. xD
plus there would be nothing to say you couldn't use 20 heal kits on you, get +20 regen, and then leap into a bunch of mobs with the regen.
Cheaters.
_________________
Never under estimate the power that language imparts. Sticks and stones may break your bones, but words can break hearts.