There are several reasons but one of the big ones that comes to mind is that fact that Toyota factory engines are machined on mulit-million dollar tooling to exact tolerances. Also when you start messing with aftermarket internals they maybe stronger but they have not been dynamically tested on this engine for longevity.
There is nothing wrong with rebuilding the motor if there is no other option to reach your goals of more power or for racing however rebuilds will probably last half as long as a factory motor and those that do so don't mind rebuilding it again. If someone thinks that rebuilding a motor is a good option to save money then they would be better off playing a rigged slot machine.
As I say often, there ain't no such thing a a free lunch, so you're right in many, make that most, respects. Having said that, a small, well equipped and knowledgeable machinist can duplicate any degree of accuracy, on a one off basis, that Toyota can achieve on a large scale. Volume doesn't equal quality, does it?
If I remember correctly the forged pistons and rods are heavier than the stock ones, so more inertia, and therefore more heat. The rings have to be fitted a little differently, so a little more noise and a need for a little more 'warm up' with the forged bits.
I have had 4 cylinder Nissan and Toyota engines last over 250,000 miles. So, if this will last half as long, say 125,000, and I'm 61 and drive around 2,500 miles a year, this should be good until I'm approximately 111 give or take a few. That' should work fine.
Almost every 1ZZ "horror story" I've heard has involved people cutting corners to save money. That's no way to go about any serious automotive venture. If you can't afford to do it right, it's better to not start the project IMO.
Anyway, I am in agreement for the most part; if I was going to stay N/A I would have got the T store short block for $1,800 or so, if you shop around you can get one for that.
When the smoke cleared for me, using a first quality machine shop for the reworking of the head, and another that specializes in lower end rebuilds for that, the numbers worked out to $1,985 for the Toyota short block and a new (Cometic) head gasket, and $2,108 for the rebuild with Wiseco forged pistons, MWR forged rods, and new everything else, including a complete rebuild and testing of the head and installation of the Crower Cams.
I went that way because I'm going to put a turbo on it next.
Film at 11:00 . . .