I do not think there is any specific reason for not doing it (I am assuming you are referring to a vertical loop here). Its a routine flight demonstration that they fly and each maneuver requires the next one to be lined up seamlessly for the demonstration. They may feel that bringing in a loop may not showcase the flight control capabilities as well as the other maneuvers they execute in their program. In the past, our F-86s and F-6s (with the earlier Sherdils), with lower thrust to weight ratio used to do vertical loops back in the late 60s and early 70s demonstrations (when there air shows were a very common occurrence in Pakistan). If you look up some of the videos of the recent flight shows over in Clifton, Karachi, you may see the JF-17 carrying out a loop.