Why?
Honestly, I dont know, but here are two things that might help :
1 - Make sure the KSManager folder is inside the /Knytt Stories/3rd Party Tools folder. Because the KS Editor will look inside this folder to run it.
2 - Make sure the path to your KS folder is short :
C://stuff that I like/games that I like/games by nifflas/games about knytt/Knytt Stories/ <- BadC://Games/Knytt Stories/ <- GoodTry that, and if it doesn't work, come back and tell us something a little more palpable about your problem, like :
What OS are you using?
What version of KS?
Has the KS Manager ever worked for you?
And anything more that might give us a little insight.