The likely reason is cost - diodes just added cost to the power supply, and the incandescent lamps (and now LEDs with internal rectifiers) are perfectly happy on 12VAC. The other reason may be electrically driven corrosion. Landscape lighting isn't exactly a bastion of good installation practices (wirenuts buried in the wet dirt, etc...) and a DC voltage will preferentially corrode the positive conductor with regards to the negative conductor. With AC, it balances out every half cycle.
A real benefit to DC is that there is no flicker/strobing, especially with LED. I know I can often see a strobing effect on LED Christmas lights when they move through my field of vision, especially in a dark room.
SceneryDriver