A crude answer is that interference management in WiFi does not scale well beyond several devices sharing one access point. When the crowd is big, the “tragedy of the commons” effect, due to mutual interference in the unlicensed band, is not efficiently mitigated by WiFi. To see why, we have to go into the details of WiFi's medium access control in the link layer of the layered protocol stack.

A Short Answer

How WiFi is different from cellular

Since their first major deployment in the late 1990s, WiFi hotspots have become an essential feature of our wireless lifestyle. There were already more than a billion WiFi devices around the world by 2010, and hundreds of millions are added each year. We use WiFi at home, in the office, and around public hotspots like those at airports, in coffee shops, or even around street corners.

We all know WiFi is often faster than 3G cellular, but you cannot move around too fast on WiFi service or be more than 100 m away from an Access Point (AP). We have seen many letters attached to 802.11, like 802.11a, b, g, and n, shown on the WiFi AP boxes you can buy from electronic stores, but maybe do not appreciate why we are cooking an alphabet soup. We have all used hotspot services at airports, restaurants, hotels, and perhaps our neighbor's WiFi (if it does not require a password), and yet have all been frustrated by the little lock symbol next to many WiFi network names that our smartphones can see but not use.