Perhaps the best reasoning as to why an advanced civilisation possessing the ability for interstellar travel would fail to colonise an entire galaxy is Geoffrey Landis’ percolation theory.
Landis makes the assumption that interstellar travel is short haul only. We might be able to make direct flights to alpha Centauri or epsilon Eridani, but anything much beyond that, moving at just a small fraction of the speed of light – let’s say between 5 and 10 percent – is going to take far too long. So instead, civilisations will hop across the cosmos via the stepping stones of the colonies they set up along the way. For example, imagine three worldships leaving the Solar System for pastures new: let’s say alpha Centauri, epsilon Eridani and Barnard’s Star, all of which are relatively nearby. They set up colonies there, begin building Dyson spheres and perhaps, after a few centuries, those colonies are ready to send out their own pilgrims to new stars further afield, which then found new colonies and, after a few centuries, they too head out on voyages of colonisation, and so on. Over the millennia, humankind’s reach gradually telescopes outwards.
What Landis realised was that not all colonies will seed daughter colonies. The drive to go further will not exist in every colony; cut-off from their mother-world, Earth, by time and space, they build their own cultures, their own histories, and face their own, perhaps unique, challenges. Some will be content to not explore further. Others may destroy themselves, or exhaust their resources before they can build a Dyson sphere. In some cases, there may be no worlds in nearby systems suitable for colonisation. The consequence of any of these possibilities is that some colonies will become dead ends and will fail to colonise further.
To model this, Landis assigns a probability of being colonised to a given planetary system. If that probability is above a critical threshold, then it will be colonised. If it is below the threshold, colonisation of that system will not take place. Eventually, all colonies may result in dead ends, ultimately limiting the extent to which that species colonises the galaxy it exists in. Even if there is one line of colonisation that does continue for a time, there will be voids all around it, left empty by the dead end colonies. A civilisation would struggle to reach Type III status in this fashion.