There are probably two problems. The first is that if you have a capital contribution test as the excluded share test looks to.... Service businesses where more than 90% of your income is from the provision of services are often not very capital intensive. You could have a lawyer providing legal services and that might not take a lot of capital.
It may well be that a nominal investment of capital by a related person would be sufficient to get more than a 10% interest in the corporation carrying on the business, just because the capital needs of the business are much less than they would be for a company that has inventory and is selling. That's one of the reasons; they're less capital intensive.
The other is that it represents a much more pure diversion of income. As I said, the basic idea behind the tax on split income rules is that it involves a diversion of income from a high-income earner to a relatively lower-income earner. So where you have the higher-income earner earning their income almost purely from the provision of services, then that seems to be much closer to the paradigm case of income-splitting. It's much less likely to be properly considered to be a return on equity, where all your income is really coming from services.