I swear there was another thread where we were talking about Krofft shows, but I can't seem to find it. So, I'll just put this here.
I forget how I stumbled onto this a few days ago, but I was reading some of the Agony Booth reviews of the Pink Lady And Jeff show, as well as the TV Tropes page, and something hit me.
The big complaint that seems to be consistent is that they weren't able to perform their own songs that made them hits in their native country, thus depriving audiences of this:
Yep. A Japanese Disco tune about a Spanish woman with cheesy Spanish sounding music motifs.
Naturally, the obvious reasoning sounds like Executive Meddling and that American Audiences wouldn't appreciate anything that wasn't already a well known song. But the other day it hit me like a ton of bricks.
International song copyright!
Now, a seasoned anime fan that actually bothers with the technical production and acquisition of shows will point out that there are just some songs you can't clear for American release. Some of it goes into butt backwards territory, as Japanese programs that use Western music can't be negotiated for Western release (the American releases of Speed Grapher have generic sounding music instead of Duran Duran's Girls on Film). Of course, a lot of Japanese music rights are impossible to negotiate for American releases od things. I once saw a Fist of the North Star DVD that didn't have the freaking epic "YOU WAS SHOCK!!" theme.
So naturally, I thought. DUH! That's got to be part of the reason. They could only quickly and cheaply (well, relatively) American music, and any performances of actual Pink Lady songs were out of the question without intense negotiation. Meanwhile fast forward to 2003 (or so) and Puffy Ami Yumi can perform their own hits on their own cartoon because the cartoon was made to sell their music, and CN made a better deal and actually negotiated for them.
So I don't know if that's the official exact reason, but that seems like a very likely situation.