Why did Islam forbid adoption?

Islam encourages orphan sponsorship and urges the sponsor to treat the orphan the way he treats his children; however, it maintains the orphan's right to know his real family to protect his right in his father's inheritance and to avoid mixture of lineages.

The story of the western girl who learnt by coincidence after thirty years that she was adopted and, thus, committed suicide is the biggest proof of the inadequacy of the adoption law. Had they informed her when she was still young, they would have spared her such an end and would have given her the chance to look for her family.

{Do not mistreat the orphan.} [263] Surat ad-Duha: 9.

{In this life and the Hereafter. They ask you about orphans. Say, “Serving their interests is best. Should you mix your affairs with theirs, then they are your brothers. Allah knows who is dishonest and who is honest. If Allah had willed, He could have made things hard for you. Allah is indeed All-Mighty, All-Wise.”} [264] Surat al-Baqarah: 220.

{If at the time of distribution, [other] relatives, orphans, and the needy are present, give them something too, and speak to them kindly.} [265] Surat an-Nisā’: 8.