Orre is what happens when human beings use an entire region as a receptacle for toxic waste.
In all seriousness, Orre itself has a very long history of mining. While there certainly have been regions that have been heavily mined without damaging the local population of pokémon (Sinnoh, for example), most regions had adopted environmentally friendly policies concerning waste run-off early in the establishment of their respective industries. This is not the case with most American regions, Orre included and especially, and consequently, most of its water tables have actually been toxic to pokémon up until fairly recently. This should also explain some of the behavior of the locals, especially in and round Pyrite Town, which experienced the heaviest amount of mining.
Of course, it also doesn’t help that its neighboring region, the currently virtually uninhabitable Blanca, was used as a nuclear testing site from the end of the 40s right up until the 70s, nor does it help that the mountains of this same region are currently being used to store spent nuclear fuel. Pokémon generally stay so far away from that area that they’re simply not found in any of the neighboring regions, and they’re sparse in the regions neighboring those.
In short, pokémon do not live in Orre because Orre is literally a toxic wasteland except in very select areas—namely all of the populated areas except Pyrite Town. The fact that man has been so tenacious as to make those spots be habitable should be a testament to our species’ very audacity.