The more relevant question is why doesn't DCS compete with Prepar3d. Lockheed Martin makes millions from implementing P3d simulators for the military and other government agencies. I suspect the answer lies in the respective base simulators and their intended functions.
Prepar3d is a full world, space-to-ocean floor simulator. Its purpose and usage is not to be the most accurate simulator of any particular vehicle. Its purpose and usage is to simulate coordinated collaboration of multiple land-sea-air-space force units. Parenthetically, weapons systems that are classified can be created and used in the simulator without regard to the general public. And, indeed, this is one of the most common use cases for P3d. Additionally, P3d does not have to "compete" for realism. Most of its users have access and training on real world weapons that appear in the simulator.
Never forget what the target market for Prepar3d is. DCS could never compete in that space.