Quoted from vdojaq:
I might be able to answer this? When I was a kid, I had just about every Hot Wheels contraption there was. I would go to neighborhood garage sales on my bicycle and buy any hot wheels track I could. Always, in every set up, a loop the loop or two, or three had to be involved. What I found out is that if the loop was too tight, the car would always come off the track. If the loops were too big, there wasn't enough centrifugal force to hold them on the track. My guess is between the playfield and the glass, there just wasn't enough room to make a proper loop to work without taking up too much space. The game would have been a one trick pony. Possibly a wire form cork-screw loop could have worked, but that is more roller coaster than it is Hot Wheels.
Again, rosh
That was my assessment too, it would have to be at the very back of the machine where there is maximum distance between playfield and glass. With it back there how do you ensure enough momentum to make the loop unless you build in some kind of accelerator via magnets and the two would take up too much space. Balcer is their designer and I assume this is his design, he's come up with cool toys before (Trunk / Roller Coaster / Couch lock etc.) so I can't believe he and the mechanical team didn't try to come up with a loop somehow. It could also be because they wanted to trim the BOM on this to lower price so they can market more to operators.
EDIT: Josh beat me to it by about 30 seconds!