Why in higher organisms respiration don't take place by skin?

Answer 1

The bigger you are, the less your surface area to volume ratio. In other words for an insect or a frog:

amount of skin/ total size of animal

is much higher than for a human because they're smaller. We would die from lack of oxygen if we breathed through our skin, there's not enough of it to allow the proper amount of gas exchange necessary to keep our cells oxygenated.

Answer 2

Because a respiratory surface must be kept moist in order for exchange of gases to occur. Most amphibians have moist skin, so they can respire through the skin. However most "higher" organisms are terrestrial, and do not remain around water all the time. Therefore, if they had to respire via the skin, they would lose too much water (it evaporates). Therefore, the respiratory surface (the lungs) are folded into the body, where it can be kept moist while retaining water.