Split Screen requires some additional processing power because you need to manage multiple view-frustrums and manage clipping and culling (including occlusion culling) for all of these views but you can save a lot of processing power by scaling back on the quality of image generated because the screen is smaller and most of the lost detail will go unnoticed; at the same time online-multiplayer for consoles tends to involve one console running as the master which eats up a ton of processing power on that system.
...
Honestly, developers are focusing on online multiplayer partially because of pressure from console manufacturers and partially because the most vocal group of gamers is also the group who wants online gaming the most (with the largest and least vocal group tending to favour local multiplayer).
