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It turns out that in a superhero movie that has many, many ... many characters on screen, Loki was one character too many for Avengers: Age of Ultron director Joss Whedon

At some point there's "too many voices in the chorus." That's how Whedon put it to MTV

Although he definitely gets mentioned in the movie, Thor's evil bro didn't make it into the final cut, even though Whedon did shoot footage of the character played by Tom Hiddleston. 

Whedon told Collider that the first cut of the movie clocked in at three hours and 15 minutes, from which he cut more than an hour of scenes to get to the theatrical version, so Loki had to go (but look out for lots of deleted footage on DVD).