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Polyphony is somewhat of a perfectionist company, they want an excellent damage system like the one in Grid, and to implement that on 700+ cars is going to be incredibly time consuming and difficult.

I've beat Forza 2 and the damage system is a joke, you drive straight into a wall at 180mph and the car just slides along the wall for like 2km's. It's a terrible system, even the cosmetics are weak. You can do a full on brake-stand burnout for 5 minutes and your tires won't blow

If you want a game with a good damage system, play Grid or Dirt, but even these aren't up to the standard of Polyphony.