I have a 1/4 inch cabinet door and I would like to install a soft close hinge, but they all require a massive hole for the machinery to go inside the door itself. You would have to have super thick door (at least 3/4" thick) to support such a hole. Is there a technical reason why soft close is not made for lighter doors? It seems like it would weaken the door to have huge holes in it and I would like to know why the machinery is not on the cabinet shelf (hidden) instead of the door.
You have not mentioned a particular hinge, but many soft-close hinges are "euro"-style cup hinges, and I assume that's what you're asking about.
Euro-style hinges were designed in, well, Europe, in the aftermath of World War II, when a great many houses and therefore kitchens had to be rebuilt, particularly after the fire-storms in Germany. The problem outstripped the capacity of individual, built-in-place-by-a-carpenter cabinets and the solution was to manufacture cabinets in factories. You can find more on the history here: https://en.wikipedia.org/wiki/32_mm_cabinetmaking_system
The Euro-style cabinets (the kind you find at IKEA and many big-box stores), also known as "frameless" cabinets, were designed by engineers for large-scale manufacturing and compact (flat-pack) transportation. They were also designed to use inexpensive materials throughout, in particular to not require solid wood (baseline euro cabinets are built entirely from particleboard). The so-called "32mm system" of vertical rows of holes is part of that system.
The hinges were designed with a "cup" that locates the door-side of the hinge precisely and provides much more support than screws alone by fitting snugly into an easy-to-machine-at-scale 35mm flat-bottomed recess cut into the door. Any hinge that meets this interface can be used without on-site drilling of custom holes, regardless of the hinge manufacturer. It also compensates for the use of weaker materials, in particular particleboard instead of solid-wood otherwise used in the door frame.
The depth of the cup varies, although I'm sure there's a minimum and maximum in an ISO spec somewhere.
The reason why this depth is more than 1/4" is just as Graphus and SaSSafraS1232 mention in their comments. The standard door thickness is 3/4" for stability reasons. It's a heavily stressed part of the cabinet and is supported only by the hinges, compared to the cabinet box elements which are supported full-length by each other and usually a wall and/or floor.