I was actually looking at Dikoting as something to write up for the 1st issue of the Dumpshock Datahaven, and I talked with a few folks about it back then.
Mechanically, Dikoting became a problem due to the much narrower definitions of damage codes. Dikoting was cool, but it didn't provide a massive bonus in SR2/3. Now though, a +1 to DV is huge. It just doesn't fit as well into the current iteration of the rules, sadly.
Unofficially, the explanation I give is that Dikoting has become superfluous Modern techniques at metalcrafting have made weapons and armor innately stronger, and while you can still spend the nuyen to Dikote something, it doesn't actually improve it any because the material is already at the Dikote level. All Dikote really does now is "bling it up".
Bull