Lots of microcontrollers have a bandgap reference built in... And typically they have really rather terrible voltage tolerances - eg. on atmel devices the 1.1v reference doesn't even have guaranteed minimum and maximum voltages across the whole range of supply voltage and temperature, but you can only expect it to be somewhere between 0.9 volts and 1.3 volts....
So why are these circuits so bad? Do they use a different design?
The transistors available in modern digital CMOS processes are worse and worse for analog functions, the more recent that process is.
The very poor device characteristics may be mitigated only using very complex schematics for the analog circuit, together with various auto-calibration methods.
The additional cost may be deemed too much for a voltage reference in a cheap microcontroller.
One can always use a good external voltage reference, but that may cost as much as a microcontroller.
So why are these circuits so bad? Do they use a different design?