Warning: contains spoilers from the 1997 film***
Hercules was born on Mount Olympus as a god. However, when Hades has Pain and Panic abduct him, they give him a potion in a bottle that would make him remove not only his immortality, but also his powerful strength. Luckily, a couple finds him and raises him with loving care.
The gods do try to look for him, too, but they discover that he has become mortal. Therefore, they cannot let him back. Years later, when Hercules has grown, he discovers that he was found and where he actually came from. The Zeus statue reveals that he was stolen and that only gods can live on Mount Olympus.
So, why is it like that? There could be a reason in the original myth. But, of course, it could differ in the Disney movie. After all, Disney does drastically change stories from the original sources as well as sugarcoat them a lot.
My guess is…could there be something on Mount Olympus that makes it unsafe for mortals to be there too long? At the end of the film, Hercules is brought back to Mount Olympus with Meg, his love interest. Meg stands outside of it, unharmed. And, of course, she was never a goddess.
But what if she stayed there for days, weeks, months, years, and so forth? Someone in a YouTube video pointed out that Zeus could change that law of only gods getting to live on Mount Olympus.
I can’t think of any other reasons why that rule is in place, except for my guess or Zeus’s possible inflexibility to change the law.