Because the power of electromagnetic radiation (energy per unit area perpendicular to the source) drops off proportional to the inverse square of the distance. So, at one unit away it's a reference for full power, at two units it's at one-quarter power, and three units it's at one-ninth power, and so on. This is the fatal flaw with Tesla's scheme: By simple geometry, you're pouring power into space and you need massive input to get any output at all at an appreciable distance.
The WiTricity project you may hear of does things based on a completely different technical footing, which is more efficient but less broadly useful. For example, with the WiTricity technology, power receivers can't be any more than a quarter-wavelength from the transmitter, which means that they can't be any further away than a few meters. Definitely not what Tesla had in mind.
