The kinetic energy has been transferred to the ground.
It's been used to make a small crater in the dirt, or to
squash some grass, or to slightly heat some dirt or grass.
Even if the falling object DID bounce back, it lost SOME of
its kinetic energy by doing a little bit of these tasks. It'll
do them again every time it hits the ground. That's why
it doesn't bounce quite as high each time. Eventually,
once all of its kinetic energy is used up, it won't bounce
back at all.
