Why didn’t Dutch survive as a lingua franca in Indonesia?

The short answer to this question: it didn't because it never was a lingua franca.

To understand this, it's important to look at the Dutch objectives when they first colonized what is now Indonesia. At the onset, in 1596, the Netherlands did so purely with the goal of controlling the East Indian trade, certainly not with the intend to spread their language or culture. They would typically seek to control strategic islands and territory while also sending out merchants to dominate trade, but made no large scale colonization effort comparable to, for example, that of the British in North America or even their own colonization efforts in what are now the United States. The Dutch East India Company simply saw no need nor economic viability for such an endeavor.

In terms of language policy, the 16th and 17th century Dutch sought not to possibly antagonize local rulers by forcing their language on them, but rather either used the local idiom (which the Dutch invariably referred to as maleis, Malay) or they used Portuguese, which was known on some of the islands they controlled due to the already established presence of Portuguese in the region. The advent of imperialism in the 19th century did not really change this. More Dutch migrated, usually to work in the colonial administration, industry or to found plantations, but still the percentage of Dutchmen living in the Dutch East Indies was exceedingly small.

Spreading the Dutch language, was still not an issue. Dutchmen would often have an Indonesian staff in and around their households, but they would reserve Dutch for use among themselves and spoke Malay to their servants. The language of the Dutch colonial military was Dutch, but newly arrived Dutch colonial soldiers were implored to learn (some basic) Malay as soon as possible to be able to converse with the locals and auxiliary soldiers, who were mostly recruited on the Moluccas.

Only in the 20th century would the Dutch begin to implement an actual language policy, after 1901 as a part of te so called ethical policy. Its goals were to bring progress and prosperity to the Dutch East Indies through local development. This included the establishment of a Dutch schooling system mirroring, apart from university-level education, that of the Netherlands in which Dutch was the main language. Many prominent Indonesian nationalists received their education within this system, the most notable of these being the first Indonesian president Sukarno, who spoke Dutch fluently. By the time of Indonesian independence, about 70.000 Indonesians (mostly from middle or upper class families in and around the major cities) had received formal training in Dutch and spoke the language, far too little to play a serious role as an official language in the newly formed country's future.

In a way, Dutch does survive as a colonial language though: as the source of many of Indonesians loanwords and in Indonesia´s legal system, which is based on the so called Roman-Dutch law. This is a form of common law and depends on precedent. Many of these commentaries were made by judges who either were or wrote in Dutch. Not all of these have been translated and/or have a commonly accepted Indonesian translation, meaning many Indonesian lawyers are quite proficient in Dutch legalese.