One of the reasons is the bar code, outdated, technology. Tags are automatically read by 360º optical scanners in conveyor belts, which move flipper-like parts that direct them to the destination flights. Tags falling of, twisted/bent mean identification is inconclusive. After the bag is set aside, and an employee checks it manually, it is then redirected to the right destination. Sometimes this makes the bag to miss the flight, or lost.
Then there is theft...