is it because the mast is all wrong, ie no spreaders, not enough downhaul?

would adding spreaders help, or just be a waste of time?

this is what hobie say about square top sails on their website on the bravo page

The square top sail is remarkable because it provides significant advantages in nearly all sailing conditions with practically no compromises. The most noticeable difference of the square top sail is the additional sail area up high. In light winds the benefit is simple. More sail area means more power, but contrary to what you might think the additional sail area actually makes the boat more forgiving in strong or gusty wind. Old school thinking would believe that the extra sail area up high would tend to tip the boat over easier, but in reality the extra sail area causes the sail to twist more and cause the top of the sail to flatten out. The net result is the center of lift of the sail moves down and the over all drive of the boat increases with less tendency to tip over. This is done automatically which makes the boat easier to sail in gusty wind.

The more subtle benefits are;

>> The improved planform of the sail. The most efficient wing or sail is one with an elliptical planform. The square top sail more closely approximates an ellipse.

http://www.hobiecat.com/sailing/sail_bravo.html

so why don't we see more on the h16?

One major reason would be that it is not class legal for racing, and performance benefits are lost on most recreational sailors.