A Couple of reasons:
At present, Annuity Rates (the level of income your fund will give you) are terrible. A pension pot of €250,000 might only pay you €7,500 per year.
Most retirees prefer the flexibility that an ARF gives. You can take as much or as little (with the 4% minimum) as you like, which better suits the average post retirement lifestyle. Indeed you can fully cash in your ARF if you like (though that wouldn’t be advisable)
On death, even within the first year, the annuity goes with you. Your spouse may get a % for their lifetime, but after that it’s gone. An ARF is fully transferrable to your spouse and forms part of your estate on death.