The most commonly asserted explanations are summed up pretty well by the following two quotes:
Most of the time, four trams arrive outbound at Piccadilly per 12 minute cycle: ex-Altrincham, ex-Eccles, ex-MediaCity and ex-Bury. The first two terminate there and reverse in the Sheffield Street turnback. The MediaCity service continues 'ECS' to the turnback at Velopark, last I checked they do this in the Velopark outbound platform. The Bury services, of course, run in service through to Droylsden.
Its partly that the Sheffield Street turnback siding isn't giving them the capacity they expected I think but also the Media City trams were supposed to turn back at Cornbrook not Piccadilly so there's currently a third more trams terminating at Piccadilly than planned. The under construction third platform at Victoria should give them better city centre terminal capacity.
They are also considering a third platform at Deansgate Castlefield as part of 2CC but its not been approved yet and may rely on office/residential tower development around Manchester Central for funding.
Basically, they don't want to try to reverse 3 trams in a single turnback (which can only hold two vehicles and only has access at one end) per 12-minute cycle. Some people think that the turnback could cope with reversing the full 15tph, but TfGM do not share this optimism (apparently... I am not in contact with Metrolink's management!); I can understand their unwillingness to introduce even more unreliability into the system than it already has, even though it costs them an extra tram on the duty to maintain the 12-minute headway. To the best of my knowledge, reversing all of them there has never been tried anyway, because whenever there is an event at City and there are extra doubles on running Victoria - Etihad Campus, the MCUK shuttles seem to be cancelled and the Eccles service runs via MediaCity. Weather this is because the trams need to be borrowed from the Picc-MCUK service to run the special doubles or just because, with the doubles using the turnback at Velopark there is just nowhere for the MCUK service to reverse, is open to debate.
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The Ashton route is supposed to have a tram every 6min when complete, so the Piccadilly turnback will then only be used every 6min.
Indeed. Eventually, the current MediaCity service will turn back at Cornbrook and the frontrunner for extension to Ashton, along with the current 5tph from Bury will be the 5tph from Eccles.
This comfortably spreads the turnbacks (in theory!!!): 5 at Cornbrook (ex-MediaCity) 5 at Piccadilly (ex-Altrincham) and 10 at Ashton (5 ex-Eccles and 5 ex-Bury).
And despite not stopping, the MCUK service still sometimes holds up the in service tram from Droylsden on its way into Piccadilly! They have to run slowly through all the platforms