Surround sound is a no-brainer for movies and games--it helps you forget you're watching a two-dimensional screen, and immerses you in the action. Movie theaters have been incorporating it for well over a decade, and sound designers for games assume a 5.1 system.
But for music, surround sound faces a number of barriers. Listeners need new equipment--speakers, a 5.1-capable amp, and a player capable of playing either SACD or DVD-Audio discs. (DVD-Audio discs can be played in traditional DVD players, so home theater owners who've already set up their systems for surround sound can hear a surround mix, but it will usually be at lower resolution than a true DVD-Audio playback. This Wikipedia entry does a decent job of explaining.)
Listener habit is another one. Few people sit down and listen to an album anymore--music is usually background material, or played through headphones while moving around. A stereo track played through a stereo system will sound reasonably decent no matter where you stand, but a surround system really requires the listener to be in a fairly small sweet spot to get the proper effect.
But the biggest barrier may be psychological. Last night, I had the chance to listen to a number of surround mixes (and create one) in a studio setting, including an amazing track by Ellen Fullman, who has spent the last 20+ years building and perfecting an instrument with 100-foot long strings and composing music for that instrument. (Her music is beautiful, ambient and infinite, and reminded me a little of the earliest Fripp-Eno experiments or Tarentel...but my vocabulary for this kind of music is admittedly limited.)
Throughout all these surround mixes, there were occasional moments of brilliance--a couple times, sounds seemed to be coming from directly to my right or left, and I'd look over expecting to see a speaker there--but by and large, it seemed like more of a gimmick than a mind-blowing addition to the experience.
I'm sure some folks said the same thing about stereo when it was introduced. But I've always thought a recording should mimic a live performance, and in that situation, you usually have a group of musicians arrayed from left to right in front of you. Stereo reproduces that sound. But unless you're a performer, you're seldom in a situation where music is coming from all around you.
Some of the problem may be a limitation in imagination--surround's pretty new, and a lot of producers don't really know what to do with it yet, so they simply put an instrument in a particular position and leave it there. There are some theatrical artists for whom surround might make sense--I imagine Roger Waters, Tom Waits, or the Firesign Theatre would be able to do amazing things, and the 5.1 re-release of Dark Side of the Moon was generally well-reviewed. But for most music, stereo seems adequate--I just don't need to hear what it sounds like to play bass on stage with the Rolling Stones, as interesting as that experience would be in real life.
Disagree? I'd be happy to be convinced otherwise--maybe somebody can point me to a surround sound recording that will blow my mind.