
Because unless the Pups if KC registered are transfered to the Retailers ownership the Kennel Club have no way to know that this is how they have been sold.
When this happened in my own numerically small breed we were able with the new owners help (they had joined our breed club) prove that a BYB was selling commercially and the Kennel Club stopped their registration privileges.
I believe that is the reason most puppies in such places are not in fact KC registered but registered with an alternative PET registry interestingly set up by the former owner of said Puppy emporiom.
A lot of my own puppy owners never transfer the registration into their own name (maybe half do) so those buying from such places are very unlikely to tell the Kennel Club that they bought their pup from a retail outlet, as they are unlikely to even know or care that this is against KC code of ethics.