THat was the ppoint of the episode 'Water.' Water is a critical resource and finding water of sufficeint purity was a daunting task. System after system after system didn't have it. Col. Tye even comments that the galaxy is a very inhospitable place. SOund like the 12 colonies were a real paradise for humans. The only other world capable of supporting humans were Kobol and Earth. Earth is essentially 2/3rd the way around the galaxy. In other words, there is no realistic place to settle.
Actually, it sounds to me like the Colonies were terraformed - whether by the colonists or someone else. Or were the 12 colonies on a single planet in the new BSG?