Why would foster parents be denied to adopt their foster children?

My oldest daughter came to us at a year old as an adoptive placement after her foster mother, who wanted to adopt her, was denied.We were told that the previous foster mother was a foster only home. The foster mom was much older, had some minor health issues, had her in daycare all the time, was low income and didn't have much of a support system. We were initially told her adoptive homestudy was denied but later learned that they never did one because the private agency she was with was a foster only agency. She very much wanted to adopt though.