On demand is a bad thing - it means you can't know when the bus will arrive because sometimes it will take a detour to pick up someone else. For a bus to be useful you need assurance of when it will arrive so you can be on time but not too early.
frequent buses are good because you shouldn't have to wait when you are ready to go. Fixed routes again mean you can plan on it.
> On demand is a bad thing - it means you can't know when the bus will arrive
You'd still have buses travel routes with fixed points they aim to be at on time. They just have more freedom between those points to deviate. Again, if you have one big bus this doesn't work. If you have lots of smaller ones, it does because not everyone on board will need to stop at every scheduled stop. (And if they do, you punt the detour to the next bus. Or better yet, spin up a new one from the garage. Mechanics you can't do with a fixed set of scheduled drivers.)
frequent buses are good because you shouldn't have to wait when you are ready to go. Fixed routes again mean you can plan on it.