They don't work for a more specific reason than that; a central planning system that was "bottom up" (asking everyone what they want rather than dictating it) couldn't work either, because people aren't capable of expressing their preferences in a way you can calculate.

How much iron does a steel mill need this year? Well, that depends on how many customers they'll get, which depends on what price they sell steel at.

https://en.wikipedia.org/wiki/Economic_calculation_problem