A lot of it was politics. At the time, Charles V was the King of Spain, but he also controlled the largest empire that any one person has ever controlled on earth. Columbus had just discovered America, and so Spain now controlled the entirety of North and South America, except for Brazil. Charles V was extremely busy with organizing this entirely new region of the world. Not only were there millions of souls that needed converting, but the Aztec and Inca empires were fabulously wealthy. (By the way, how wealthy am I talking about? The first shipment of gold from the Aztec empire back to Spain contained MORE GOLD THAN HAD BEEN MINED IN THE ENTIRE HISTORY OF EUROPE, which is remarkable by any standard! Now realize that they brought that much gold back from the Inca empire too, and they kept that pace up for over 125 years!!!) As you can see, this would be quite a distraction.
BUT… Charles V controlled more. He controlled the Netherlands, Sicily, and was the Holy Roman Emperor (a new position for the Spanish). The HRE was, in actuality, the very loosely controlled region of Germany, which was made up of 360 tiny provinces that greatly resented having any kind of domination, let alone foreign domination. (The region was usually controlled by a German, and even that was barely tolerated.) Since Charles V enjoyed the Royal Patrimony (a special power to enforce Catholicism within his realms), many local princes knew that breaking away from the church would also undermine his political control over the HRE, and thus, they would maintain the independence of their tiny kingdoms. It provided the base for a political movement.
So, Charles V hears about Luther, but doesn’t give him much credence. He’s too busy making Spain the most powerful nation on earth, and thinks that converting America is the far more important religious issue. He thinks that Luther will die out eventually, and so delegates the problem away. By the time he realizes how large and serious the movement is, it’s already too late to stop it. The problem with Charles V’s empire is that it’s simply too big to effectively manage.