There are two questions here:
- Why does life only generate life?
- Why doesn't life continue to be generated on Earth?
The first one is easy. We don't only generate life. If that were true, it might be illegal to flush toilets. Life forms of some kind would occupy all the space in our atmosphere. Babies - or some living things - would rise up from our graves. Conceivably none of the millions/billions of people who have died from the beginning of history (and well before that) would be dead. Add to that animals, and everything in the other Kingdoms included in Life, and there would be nothing left perhaps except for life. To be honest, life generates heat, death and simple substances much more commonly than it generates life.
If you mean, why does like produce like (in your case, a life generates a similar life form*, that's because of genetic material. New life is based on the genetic material of the preceding life form. People don't give birth to zebras, zebras do. When the genetic material is damaged enough, we give birth to a non-viable or diseased child. If a mutation is favorable, it is (under the right circumstances) spread through an advantage. An example of this is the appearance of lactase, an enzyme which allows adults to derive continued nutrition from animal milk.
As to your second question: why doesn't life continue to be generated on Earth? Are you 100% sure that it isn't happening? How would you recognize a life form foreign to our own? How many different kinds of life can evolve under the same planetary conditions, the same planetary element ratios, etc.? If a very rudimentary silicon-based life form evolved in, say, the last 2,000,000 years, would you know how to look for it? In other words, are you defining life only as we now know it - a carbon based, DNA-propigated form?
Furthermore, if a non-carbon based life form could only evolve on this planet to a very basic, simple level, would you give credence to it as a newly evolved "life" form? Intelligent life is rare. I would guess that very simple life forms are far less rare in the Universe.
How would you classify (or explain) the chemosynthetic bacteria that oxidize sulfur instead of oxygen?
I realize that there are a lot of questions here and not many answers. But part of finding an answer is asking the right questions.
The Origins of Lactase Persistence in Europe