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Why did the US military prefer the C-54 over the C-69 Constellation?
Short answer
Because the C-69 arrived late and troubled: its Wright R-3350 engines suffered fires and overheating, the B-29 had priority for those engines, and the war was already tilting toward the Allies. The USAAF preferred the C-54 Skymaster, and by war's end only 22 C-69s had been built.

A requisitioned airliner
In February 1942, after the United States entered the Second World War, the government requisitioned the 80 Constellations that TWA and Pan American had ordered. The 50 L-049s of both airlines would become the C-69 and C-69A troop transports, and Pan Am's L-149s would be replaced by the L-349, with a cargo door, as the C-69B. On paper, the USAAF was going to have a modern four-engined transport; in practice, the program stumbled again and again.
The R-3350 problem
The Wright R-3350 engine that powered the C-69 was also the one used by the B-29 bomber, and its failures affected both. When a test XB-29 crashed into a Boeing factory after one of those engines caught fire, 14 factory workers died, along with pilot Edmund Allen and his crew. All aircraft with R-3350 engines, including the C-69, were grounded until the investigation concluded, and testing did not resume until after June 18, 1943. Then a fuel leak appeared that wasn't resolved until April 1944, with a new tank-sealing method, and overheating and fires continued. On top of that, the B-29 had priority over the C-69 for receiving those engines.
Low priority and few aircraft
Lockheed expected to build four C-69s before the end of 1943, but the USAAF's low priority for the model prevented it. As the war tilted toward the Allies, the aircraft mattered even less in military plans, and only a few served in the war's final year. Meanwhile, the USAAF relied on Douglas's C-54 Skymaster. By the end of the war, 22 C-69s had been produced, seven of them undelivered; except for the C-69C, all were declared surplus and sold on the civilian market between 1946 and 1947, where Lockheed converted them into L-049 passenger aircraft.
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