Just a theory (could be way off), but I think part of it is the computing power required for HD graphics. You can't have one console render it all twice (or three or four times) and maintain the same level of graphics. For example, in L4D, split screen dramatically reduces the game's draw distance. For example, in the elevator in No Mercy, you can't see the button panel next to the door unless you're in the front half of the elevator. And this is a distance of maybe 15 in-game feet we're talking about. In Gears 2, I've noticed that a lot of the cover destruction effects are dumbed down, or even removed, in split screen.