From what I can gather, GWAS is not used in oncology because ~ cancer is characterized by rare/ random mutations that amount to an overall burden on the genes that they up/down regulate. Is this assumption correct?
Genome-wide association studies are used all the time in oncology. Using WGS to look for recurrent somatic mutations (at a single-variant or gene level) that associate with severity, resistance, prognosis, or other property of the tumor is, by definition, a genome wide statistical scan for association with outcome.
That said, most of the time "GWAS study" implies a large-scale microarray-based study to associate germlineinherited mutations with a phenotypic outcome. While germline inherited mutations may have modifier effects on disease progression and/or treatment responses, of more direct interest are the mechanisms of causal somatic mutations in the tumor.
One of the reasons that microarrays work well for germline studies is the presence of LD such that variants on the array will "tag" causal variants missing from the array, and even collections of low-frequency causal variants can be partially tagged. However somatic mutations are rare, and are almost always not present on existing microarrays. Further, even recurrent mutations can be assumed to occur on a random genetic background; so there is no statistical LD enabling these somatic mutations to be 'tagged' by microarrays -- hence why studies of tumor genetics typically use sequencing as opposed to microarray.