Why doesn't SQL Server support unsigned datatype?

If I had to guess, I would say that they are trying to avoid a proliferation of types. Generally speaking there isn't anything that an unsigned integer can do that a signed integer can't do. As for the case when you need a number between 2147483648 and 4294967296 you probably should go to an 8 byte integer since the number will also eventually exceed 4294967296.

For that purpose you could use -2,147,483,648 as the seed value.

Identity(-2147483648, 1)

I found a similar question on Microsoft Office Dev Center.

The reply from Jim Hogg (Program Manager) has some pro's and con's for adding unsigned int's. The major con is the rules to implement implicit type conversions become a nightmare to get right.

The request was closed as "Won't Fix".