Because at A long range, you're going to aim for the head anyways, so the extra armor pen is pretty much useless unless you suck at aiming and your opponent sucks at aiming. And in that case, the M4 will beat the SG because it has better spray.
This seems to be your main argument agaisnt it, I don't know what elo you are but I'm supreme right now and I cant hit most long range ak headshots. Maybe high GE is different, I'm not there yet.
The thing is, sure AK is better ALWAYS, if you have aimbot. But people make mistakes and dont have the skills to get 100% headshots. I will proparly hit 40% of my shots long range with ak, SG would prolly make that 60%.
The strenght of SG isnt in the stats or in the price. It's in making it easier to headshot from longer ranges and from headpeek spots, thats all there is to it.
Again, I'm not saying BUY SG ITS ACTUALLY 100% VIABLE. Obviously it has its flaws, and I myself pretty much never buy it, but you seem to be just blatantly saying that it has no place in game and I think you're just wrong there.
You aren't even supposed to take shots with the ak at ranges like that because that's awp range, but the only way a krieg wins that fight is if the awper is garbage. The reason why the krieg is 99% useless is because there are no viable situations where it will actually be more useful then any other gun. Want to play dust2 long? Buy an awp, or go for ak+nades so you can be more useful to your teammates, and allow yourself to gain map control more easily instead of taking aim duels that you might not win all the time. If you can't afford an awp or ak+nades you shouldn't be buying a krieg because then you're just hurting your team. Want to ignore armor? Won't make a difference most of the time because you should always be going for headshots, hence armor is only relevant when using smgs. Want to keep your opponents at long range to make their weak buy useless? Don't challenge them if you think they're going to force a close angle, play back, setup crossfires and use flashes and mollies so that you don't want into an unfavorable gunfight.
There's a reason the krieg isn't used by anyone except silvers, it's because it simply isn't viable. Everyone who is mildly decent at this game has realized that the scoped rifles are simply not worth the money you spend because there are far better ways to spend your money. It really almost has no place in the game outside of tilting your opponents actually, it will only hurt your team if you buy it to try and win certain gunfights that are unfavorable either way, and most of those situations require you to use nades anyways.
It doesn't have any potential that the AK can't already do. There are three constants in CS:GO: you should always be aiming for the head, your gun should be effective in as many ranges as possible, and money is finite.
Will the SG kill in one shot to the head? Yes. Does it cost less than the AK? No. Does it have better accuracy than the AK? No.
Can the AK kill in one shot to the head? Yes. Does it cost less than the SG? Yes. Does it have better accuracy than the SG? No.
Out of the three constants, the AK is objectively better in cost. It doesn't matter how good you get with the SG, because it will inevitably degrade down to "can you land a headshot with this gun?" If the answer is yes to the SG, it will be yes to the AK because they both have accurate first shots, and AK has a better spray pattern as well, so it's better in extended close range exchanges. And since the AK is cheaper, you can get it sooner, and without ruining your economy.
Even in League, certain items are powerful because you can objectively measure their gold efficiency and slot efficiency, and champions fly under the radar because there's literally hundreds of them interacting with every item build possible and every team comp possible.
CS:GO, on the other hand, has only a few numbers to worry about, namely the cost of the gun, the fire rate of the gun, the damage of the gun, the movement penalty of the gun, and the armor penetration of the gun. Armor penetration is negligible in most scenarios, and movement penalty is negligible as well, so the only important numbers are cost, fire rate, and damage. When the cost of a gun is low for the damage and fire rate it provides, it gets purchased. The R8 was purchased because it was basically an AWP for nothing. The CZ was purchased because it was basically an AR for nothing. The Tek9 is purchased because it's basically a single fire AR for nothing. People buy the M4 or the AK instead of the AUG or the SG because they're cheaper and accomplish similar results. There is no hidden potential, because there's so few variables to measure that you can easily determine that it's just doesn't provide any stats that justify it's +$800 cost to the AK.