There are various reasons why sentients do not all ascend to higher toposophic levels. Among these are:
Ascension means dying to one's old self, many people are attached to their current status
Ascensions sometimes go wrong
Ascension technology may be restricted in some polities
There may be ideological, religious, peer-group or memetic pressure against it.
Ascension requires great discipline and dedication and training (although there are godseeds and similar devices these can have rather unpleasant side-effects if one is not psychologically balanced)
S1 and higher are perceived (rightly or wrongly) as working hard, and baseline-equivalent beings may not wish to give up their life of pampered indulgence
Some worry about real or (more often) imagined negative events (loss of human feelings and appreciation, loss of sensual desires )
Many are just unlucky enough that they'll never recognize an opportunity to ascend.
Beside all the obvious (and less obvious) reasons, most beings do not have a strong incentive to ascend. It is an awful lot of work that cannot be left to the AIs (even ATMs, Automated Transcendence Machines, essentially force the ascending being to do a lot of re-evaluation and personal change), which makes most beings, habituated to live in comfort, less interested in ascending. Those who wanted to ascend, did so long ago and left behind a culture of those less inclined. Over time the fraction of ascenders went down, and a steady state emerged.
Some mass-transcensions have been linked to serious memetic or neural engineering to promote ambition (sometimes with the goal of inducing them, more often with other goals but having transcension as a side effect).