And I never figured Ambassadors to be created in huge numbers to begin with. I like to think, based on the background, that these ships were the Galaxy-class of their time: the biggest and the best Starfleet could muster, for the big long exploration missions that made us proud. There wouldn't be more than a dozen like her in the fleet, like the Constitution or Galaxy (initially anyway) of their days.
As such, inasmuch as the Enterprise-D rarely ever ran into one of her sister ships, the Ambassadors would be rare enough that we would almost never see them - indeed, how often did the E-D rendevous with one on-screen? Horatio, Zhukov, Excalibur? So not seeing them amongst the dozens of other ships wouldn't be that big a deal, since they were not so common to begin with. Similarly, I like to think that some of the Ambassador class is still doing the mission they were built for, and are simply WAY out there and not able to be recalled in time to participate in the Dominion War.
Remember the two deep-space explorers that were originally supposed to rendezvous with Voyager in "six or seven years", putting them at least twenty years away from the Federation? Ambassadors. Yeah.