The main advantage of diesel-electric is that it offers a great deal of torque at low motor rpm [from Physics Forums]. In effect, the torque curve of an electric motor is highest at 0 rpm, and has a very flat decrease as rpms increase.
This is of great value for vehicles that have to pull a great deal of weight, and to overcome the inertia of moving it from a standing start. It is of little or negative value for aircraft because it is much less efficient. Anytime you generate power from one medium and then use that power to drive another medium, a lot of power is wasted. So converting diesel oil to mechanical energy, then further converting it to electrical energy, is far too wasteful and unnecessary for a helicopter, where every erg counts. With helicopters, which these days mainly use gas turbine engines, as much of the power as possible gained by burning fuel is converted directly into rotary motion. Note also that massive torque at low rpm is useless for rotor aircraft, since it is only at high rpm that such craft are able to fly.
Important, too, is the fact that dual-power systems like diesel-electric add a lot of weight, since you are dealing with two different types of engine. For any aircraft, especially the helicopter, that may even be a bigger drawback than wasted energy—though these things may be viewed as two sides of the same coin.