Basically it was the engine, and politics.
The DB engine was hard to produce. That's why the early 109s had Jumos. When they DID get the production going, it was barely able to keep up with 109 demands. The 110 saw limited production because of this (it took up 2x as many as a 109, those could go to better use elsewhere, etc).
That's one reason why only one major contract was given out: all of the designs were for the same engine, kind of like how a lot of US designs all used the Allison. It was the best option at the time.
The FW190 was actually brought about by a lack of an inline engine. It was designed around the radial because there would be the least amount of objections about stealing the in-line engines (DBs going to 109s, Jumos being horded for ju88s and he111s).
Keep in mind Germany had scarce few resources in WW1, and those were mostly stripped away for THAT war. By the time the still-ravaged nation entered WW2 it was still without certain precious metals. The metals needed to produce engines were precious and they couldn't just produce more (they were doing the best they could).