Why aren't hybrids diesel rather than petrol?

[benlovesgoddess]

Hi, this has been bothering me since i saw my first honda insight in about 2006, and pops up whenever i think about a Prius - why isn't the conventional engine a lovely efficient diesel rather than a regular petrol?!
For maximum mpg, surely harnessing free electric to the already more economical diesel is best?
Weren't submarines always diesel (not petrol) electric, so there can't be some massive problem with using diesel?
Apologies if this subject has already been raised and answered elsewhere, but it is still a huge puzzle to me!
Yes, there's a couple of 4x4 diesel hybrids, but I'm talking normal cars here!