Part of it was no doubt down to the mechanical constraints -- lighting, makeup, and such could have worked better, but the budget and facility might not have supported them.
Part of it is that the role of the Grand Guignol in society has been taken over by the visual media -- currently the Saw and Hostel school of "torture horror" -- and so the theatrical community writ large has let those muscles atrophy.
Part of it is that this is not something that theater likes to say about itself. An awful lot of authorities claim that no play of Seneca's was ever performed, or that Titus Andronicus is a bad play (rather than what it is, a brutal play), or otherwise talk as if theater didn't begin as Dionysian orgy complete with omophagia. From there it's just a hop and a skip to versions of Hamlet that leave out the ghost. With nothing pushing theater into that niche, and no social vacuum waiting to be filled and pulling theater into it, this kind of intellectual softness can perpetuate itself.
Part of it is that the moral raison d'etre of the Grand Guignol and Dreadful Penny's -- to implicate the audience in the performance and indict us as batteners upon bloody violence -- is so often, and so easily, used as a transparent excuse to present naked carnography. Theatrical critics of the type adduced above are sensible of the risk of pandering, in this realm at least, and often the decision is taken to simply avoid the question, or to treat the entire topic as distasteful. This is evasion. The line between Peeping Tom and Saw IV may be murky, but it's there.
And all of it is kind of a shame, because if the cast and the playwright hadn't had to fight both the audience and themselves, they might really have gotten something going on.
[1] It's based on a play by Matthew Rossi called Dreadful Penny's Midnight Cavalcade of Ghoulish Delights. I think this Matthew Rossi is not our own