My own experience, and my sense from talking to other organizations, is that management time is a significant opportunity cost, while the benefit (the work done by the intern) is both highly variable in quality and potentially not that great in expectation—not just because interns may be less experienced, but also because you probably put in fewer resources into the selection process, commensurate to the expected duration, cost and amount of work the intern puts in (all low relative to a full hire).
Some organizations leverage internships better, typically in roles that require time but not a lot of experience/​expertise, and that require minimal supervision—but precisely because of that, the internship because less valuable from a talent pipeline perspective (since by definition you already have an existing source of free labour).
My own experience, and my sense from talking to other organizations, is that management time is a significant opportunity cost, while the benefit (the work done by the intern) is both highly variable in quality and potentially not that great in expectation—not just because interns may be less experienced, but also because you probably put in fewer resources into the selection process, commensurate to the expected duration, cost and amount of work the intern puts in (all low relative to a full hire).
Some organizations leverage internships better, typically in roles that require time but not a lot of experience/​expertise, and that require minimal supervision—but precisely because of that, the internship because less valuable from a talent pipeline perspective (since by definition you already have an existing source of free labour).