Good reasons:
* Most drug candidates just don't work
* Even among the drug candidates that do, figuring how to safely deliver them to their target is very hard (looks similar to "just doesn't work")
Bad reasons:
* It's too expensive to prove that a drug works
* It's too difficult to differentiate the patients for whom a drug works and the patients for whom it does not
* It is very hard to predict recruitment and to actually recruit patients for clinical trials
* There aren't enough people with the disorder who are also rich enough to afford treatment to justify development
There is also the ole', drug works 20% of the time and kills the patient 80% of the time.
> It's too expensive to prove that a drug works
I'm not sure that is necessary a bad reason. You need to factor in a lot of concerns to determine what "too expensive" means.
But if you are going to spend billions of dollars to develop a drug that only treats about 2 people a year it is likely too expensive even if it is 100% effective. That money would be better spent on treatments that have wider applicability.
Of course this is not simple to measure. Costs aren't known upfront and the research may end up proving invaluable to more widely applicable treatments.
So it is a judgment call and not necessarily a bad reason.