It’s because Calif is crazy generous with full tuition Cal grants, it can’t afford to give much merit.
I don’t remember the exact numbers but I read somewhere that something like 40% of the UC students and CSU students get Cal grants. If any of that is true, having that many students going with free tuition means not much is going to be available for merit.
The Cal Grant system is too generous. It’s either free tuition or nothing.
And then there is the middle class scholarship for those who miss the Cal grant cut off
That said, the low/mid tier UCs do give some merit for high stats in hopes of poaching some students.