Part of the reason is that he didn't just want to live a life of pleasure... he also wanted to revert to a state of blissful ignorance, and not know that the matrix was a fake reality.
That would go against the moral principles of the ship, whose main goal is to enlighten and bring awareness about the matrix. It would be immoral for them to erase his memory even if they could.
Cypher also was extremely selfish, secretly hated the crew, and had no qualms about selling them all out for his own benefit.