Maybe he could but didn't think it was his place to play god. Maybe the Lion Turtle specifically told him not to. Or his past lives for that matter.
I'm not too fond of that reasoning. One thing I like about eastern philosophy is the idea that anyone can reach enlightenment or develop themselves. The idea that power is something that only special people should have seems more consistent with western theology. This is where my earlier thoughts about anyone becoming a bender or avatar came from.
Korra is the Avatar; I imagine her offspring could potentially be Benders of any kind, even if she was originally from the Water tribe. How many Avatars do we know of that actually had kids?
Interesting thought. Could an avatar have kids with any of the bending abilities or are they limited to whatever element the avatar was born into?