I favour moving as much application business logic into stored procedures as is possible, thereby abstracting out the UI layer from the business logic
I think I can help with wondering why it's not in wider practice--this is not a good idea. The database is a chokepoint, and you want it processing as few business rules as possible. The enforcement of business rules really belongs in the middle tier, whatever that might be for the application. Let the code in the intermediate levels do their thing and then send the result to the database.