So. Much. Sand – We all know how much Anakin dislikes sand. Moreover, it makes sense that Obi-Wan and Yoda would hide Luke on Tatooine. It would be the last place he would go as it holds dark memories for him. His entire childhood as an enslaved person gave him enough trauma to last a lifetime. Even as Darth Vader, he only went there when he had to. It would’ve pained the Sith Lord to be back where it all began, where his life had gone from bad to good to excellent to a living hell.
For Obi-Wan, Tatooine was the logical choice to hide Luke and himself. It was the one place the Empire wouldn’t bother to look. Also, it served as endless torture for him. Watching his best friend’s son grow up without his parents was his just dessert. However, Kenobi felt he owed it to Padmé to ensure that her child grew up safe and away from his father.
Tatooine was full of shady figures. The Hutts. Thanks, Book of Boba Fett, Tusken Raiders – who aren’t genuinely evil. Various criminal organisations. As Obi-Wan tells Luke in A New Hope, Mos Eisley was full of scum and villainy. No wonder Han and Chewbacca were found hanging out there.
Anyway, Empire had no interest in Tatooine unless they dealt with Jabba or one of the criminal organisations. It wasn’t a planet with essential minerals, equipment or even valuable species like the Wookiees of Kashyyyk.
Going over to the Obi-Wan Kenobi series, there will need to be a reason why Reva – the Third Sister – is on Tatooine. There have been rumours that one of the characters central to the story will be a Jedi. However, the Jedi’s death in front of Tatooine’s residents, including Owen Lars, will prompt a response from Kenobi.