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Short version: 1. Schedule/budget - saving mid-level requires additional time for coding and testing, which translates to more additional costs. 2. Platform issues - saving mid-level requires a larger save file, which may be an issue on platforms without hard drives 3. Gameplay issues - avoids things like missing something and not being able to go back
Long version (for those who want a longer, more involved description - warning: may be boring): 1. Schedule/budget. When saving mid-level requires much more detailed save files such as player and enemy data (location, current action, damage, ammo levels, etc.), object states (picked up, respawn time, etc.), achievement related data (e.g. number of head shots in a row), and possibly other data. This increases the amount of code for the programmer to write. Code must be written to handle the saving and loading the additional data and also to restore the level to the saved state. This results in additional programming time. It also greatly increases the number situations that have to be tested, which increases the amount of time the testers need to spend on the game to ensure the bugs are kept to a minimum. This can add days or weeks to the schedule, with a corresponding increase in the cost of the game. 2. Platform issues. Size of the save file may become an issue on platforms without hard drives. This is much less of an issue now but the X-Box 360 can still be purchased without a hard drive. Generally speaking, though, this isn't that big a deal with the latest generation of consoles. 3. Gameplay issues. If there's only one save file, it's possible to miss something in earlier in a level and not be able to go back. The only way to go back in that case would be to restart the entire game. Depending on how often you can save and how easy it is to load a game, it can make some achievements a lot easier to obtain. The overall difficulty of the game might also be lowered. This also means you'll probably finish the game a lot sooner and require fewer replays to get all the achievements. The quicker a game is finished, the less perceived value there is in the game. Loading times for the saved games can also increase player frustration. The layout of the disc may be optimized so that the art for a level is close together, reducing the seek times when loading assets. Additional assets for mid-level game loading might be located all over the disc, which will greatly increase the load time (primarily due to seek times for the drive). With the increased complexity and additional testing required, the likelihood of the game shipping with serious bugs is increased. This can cause player frustration (resulting in reduced purchases of the game) and increased customer support issues (further increasing the cost to the company).
It's not just the designer that's responsible for how the game comes together. The design is constrained by what's possible from a technical perspective and what can be optimized. The technical limitations also put restrictions on the art/sound. The producers also have a say in the features and any changes mid-production. Marketing also has a bit of say as well, especially if the game is demoed. Finally, the platform company (Microsoft, Sony, Nintendo) have a lot of restrictions as well (especially when it comes to network/multi-player issues).
So, there are a few reasons. It's a set of compromises and not everyone will be satisfied with the end result. I know this still doesn't really help things be less frustrating while playing the game but at least you'll have a better idea of the reasons involved.
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