Onions (and other alliums) get their characteristic flavor from a combination of two chemicals in the onion. Normally these chemicals are separate in the onion. When you cut the onion, the chemicals can and do mix. The more you cut, the more chemical mixes. So finely minced garlic, for example, has much stronger flavor than a whole clove.
The food processor is a challenge for chopping onions. Without a good amount of pre-cutting and only a very brief processing, the food processor chops onions poorly. The chop is very uneven with large and small pieces and many pieces totally liquefied. So when you cook this it cooks unevenly and steams for the first part from all the free liquid. Further, with the liquefaction comes a very strong reaction between those chemicals that in strength has a bitter unpleasant flavor.
However. there are times it works well. Lidia Bastianich does a mire-poix this way for some dishes, onion added last and in pre-cut chunks. But it's not something she commonly does. Daisy Martinez makes a Latin-style sofrito this way http://www.daisycooks.com/pages/recipes_detail.cfm?ID=1
and a recaito this way http://www.daisycooks.com/pages/recipes_detail.cfm?ID=5