Tito's popularity faded as Hulkamania took over. Once Savage won the belt, like Hammy said, he basically became a glorified jobber. Success with Strike Force an anomaly, and after Demolition won, he became a jobber on a full time basis.
The height of his popularity was in 84, and he was never gonna regain that even with a world title run. It would have made more sense to let Snuka have a run in the early/mid 90s, and he didn't deserve it either.
One other thing.....
Had we seen a Tito era, we probably would have also been subjected to a Greg 'The Hammer' Valentine reign, at least a short one. That was Tito's biggest feud, and Mcmahon would have been forced to rekindle it.
Wrestlemania IX Main Event: Tito Santana vs Greg Valentine
I laugh and shudder at the thought.