Why doesn't Bitcoin return lost coins back into the block reward? The idea of putting back lost Bitcoins back onto block rewards seems like a great idea. 

I acknowledge that there were quite a handful of early adopters who were generating blocks daily, but had no idea what they were doing. Time passes, they forget about Bitcoin and they format their hard drive or whatever. Their coins enter the nether, never to be seen again.

I wouldn't be surprised if >5% of the current coins in circulation were lost due to mishandling. My question is, why isn't there something implemented for this? I can't find any disadvantage for this feature, it would simple as invalidating coins that haven't been transferred in x amount of time, which is probable for only sorting lost coins.
As Stephen points out it would force people to spend coins. Age is not a proper measure of lostness. A common recommendation for savings accounts is to put them on physical backups such as printed QR codes that you add to while the account itself remains offline. People may even will their Bitcoin savings to their children. To force people to shuffle these coins around from time to time to keep them from being taken undoes one of the major safety features of Bitcoin. Namely that transactions can not be reversed, and your accounts can not be frozen or taken from you by any mechanism.

Also there is no reason. The entire Bitcoin economy could be run on a single bitcoin because of its divisibility. There simply is no reason to break other important Bitcoin features to regain those coins. It wouldn't even actually increase the miners' rewards because for every extra coin brought back the wealth is distributed over more coins reducing the value of each coin with inflation. A million dollars of value spread over 1000 bitcoins if there are 1000 bitcoins in circulation, is the same one million dollars of value spread over 1 bitcoin if there is only 1 bitcoin in circulation.