The short answer is "because unification wasn't allowed."

At the end of the war, there was very broad support in Austria for unification with Germany, and the feeling was reciprocated because the issues that had prevented unification earlier, in 1871, were largely gone. I.e., Austria was no longer a monarchy that would rival the Hohenzollerns from Prussia for imperial supremacy and it no longer had substantial non-German-speaking minorities. In addition, the rump state of Austria-Hungary left at the end of the war -- an unrecognized state that called itself the Republic of German Austria -- actively sought unification since two of its three main political movements (Social Democrats and Greater German Nationalists) were in favor of it, and even its more previously independent-minded Christian Social Party agreed to it. The tentative parliament of the country reached out to Wilson shortly after the German surrender to appeal for unification and subsequently held talks with the Weimar government on the topic.

However, once the peace treaties formally ending the war were promulgated, the idea died. The Treaty of Versailles (with Germany) explicitly forbade unification in its Section I, Article 80 ("Germany acknowledges and will respect strictly the independence of Austria, within the frontiers which may be fixed in a Treaty between that State and the Principal Allied and Associated Powers; she agrees that this independence shall be inalienable, except with the consent of the Council of the League of Nations"); and the Treaty of Saint-Germain (with Austria) did so as well, in its Article 88: "The independence of Austria is inalienable otherwise than with the consent of the Council of the League of Nations. Consequently Austria undertakes in the absence of the consent of the said Council to abstain from any act which might directly or indirectly or by any means whatever compromise her independence, particularly, and until her admission to membership of the League of Nations, by participation in the affairs of another Power."

Subsequently, under the republic formed in 1919, Austria charted an independent course, even while the desire for unification remained strong on both sides of the border. However, the international community, embodied in the League of Nations, remained vigilant on the matter. Even an attempt to establish a customs union (Zollverein) in 1931, desired particularly because of the collapse of one of Austria's most important banks with the onset of the Depression, was ruled out by the League. Ironically, there was a movement by the Social Democrats in Austria away from the idea of unification with the rise of the Nazis on both sides of the border. The Christian Social Party, which eventually established a dictatorship in 1934 and put down a Nazi coup in the same year, was committed to Austria's independence from Germany until unification was achieved by force with the Anschluss of 1938.

There's a good general outline of this history in the context of the Zollverein here: https://library.cqpress.com/cqresearcher/document.php?id=cqresrre1931042300#H2_2

In addition, Julie Thorpe's book Pan–Germanism and the Austrofascist State, 1933–38, provides a great overview of the political divisions in Austria in the latter part of the First Republic period, including the view of the three political camps on the matter.

Hey there,

Just to let you know, your question is fine, and we're letting it stand. However, you should be aware that questions framed as 'Why didn't X do Y' relatively often don't get an answer that meets our standards (in our experience as moderators). There are a few reasons for this. Firstly, it often can be difficult to prove the counterfactual: historians know much more about what happened than what might have happened. Secondly, 'why didn't X do Y' questions are sometimes phrased in an ahistorical way. It's worth remembering that people in the past couldn't see into the future, and they generally didn't have all the information we now have about their situations; things that look obvious now didn't necessarily look that way at the time.

If you end up not getting a response after a day or two, consider asking a new question focusing instead on why what happened did happen (rather than why what didn't happen didn't happen) - this kind of question is more likely to get a response in our experience. Hope this helps!