1) Getting Desolator deprives you of the 2 strongest orb effects in DotA, lifesteal and Chain Lightning (at least in DotA 1).
2) MoC has the advantage of being cheap enough to be buyable by support heroes, so if you only need one -6 armor reduction, you can let someone else buy the MoC while the carry can build that bigger DPS item.
3) The strongest contenders to Desolator are Crystalys/Buriza and Maelstrom/Mjollnir. Both options have easier buildups than Desolator, and have a pretty good scaling. One thing to notice is that the DPS repartition is, from my experience, something like 35, 25, 15, 10 and 10% in a team, though 45, 30, 15, 5 and 5% aren't impossible. Malle's chart above show you that in most cases, the damage amplification it gives is between 15 and 36%, as it's quite exceptional in most lineups to get negative armors. Obviously, Desolator would work great if ALL your team could focus the enemy affected by the -6 armor debuff, but that's not always the case. If for example your hardest carry were to buy Desolator and is the only one in your team to benefit from the armor reduction as he's the only one attacking the hero he's attacking, it's pretty easy to show Buriza is more interesting than Desolator. If you neglect the +21 damage advantage for Buriza, Critical Strike multiplies his DPS by 1.375x, while Desolator's -6 armor multiplies this number by a smaller number in most cases, so Buriza wins hands down.

In the case all your team could focus the same enemy and we use the 35/25/15/10/10 repartition, and assume the hardest carry has a base damage of 200, compare the DPS increase at the team level :

- Desolator : [(1 + 60/200)*0.35 + 0.25 + 0.15 + 0.10 + 0.10]*1.15-to-1.36 = 1.21-to-1.43x the initial team's DPS
- Buriza : (1 + 81/200)*1.375*0.35 + 0.25 + 0.15 + 0.10 + 0.10 = 1.27x the initial team's DPS

As you can see, Desolator can work better than Buriza assuming your team can focus the same enemy at the same time, but things don't always work according to the plan, which makes Desolator less interesting than Buriza in the simple example I gave above.

I'd say Desolator is a good item, but not in the context where most people would use them ; you don't buy it on a carry early-game, as there are better ways for him to boost his DPS, while potentially saving his orb slot for lifesteal. Mjollnir has such a strong AOE effect and boosts so much DPS that it's a good choice for boosting about anyone's DPS.

What makes Desolator interesting is once your team is pretty well stuffed, i.e. #1, 2 and even 3 have most of their items. You could then get Desolator on one of your heroes to boost your whole team's DPS, as it's getting pretty hard to find other options to boost your team's DPS.

It can work in pushing strats. It can also work on #1 or #2 if you make everything to snowball and finish the game before the enemy gets armored, but as shown above, Buriza and Mjollnir can boost more your DPS in early-game and are less a gamble than Desolator, whose effectiveness shines either in early game or in very late when no other option can multiply your team's DPS.