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Because it was clearly intended as his closure. He was de-mutated (in fact he was the only one of Shredder's henchmen demutated), and the Turtles knocked him out. We don't need to see Baxter say, "After I got turned back to normal I applied for a job at an electronics company and became an inventor."
I think you people who keep saying there's these "plot holes" because you want every little detail filled out about characters is bizarre. When that Season 4 episode aired I realized Baxter was done and we probably wouldn't see him in any Season 5 episodes (and sure enough, we didn't), and never expected to.
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