Why is Spell Vamp so limited?

because vladimir.

harder to balance than lifesteal

People generally aren't fans of champions that get slightly ahead and can sustain their life through an exchange.

Lifesteal is balanced around auto attacking, but type champions are guaranteed to land all their abilities on you, which makes SV overbearing and unhealthy.

There are too many abuse cases for it, they don't even bother trying to make it available for ad casters for this reason. IIRC there was even an issue where janna was too strong with it at one point.