Razz,
I'm betting that you are an experienced player who knows the rules fairly well. As a DM I also know the rules well. But for beginning players and for casual players, AOO add complexity that they have no time or desire to understand.
My wife plays D&D and has been for three years but she still rolls her eyes at AOO. I could say, "suck it up and read the book" but that just doesn't work in human terms. I'm not going to kick her out of the game just because I have to walk her through it each time.
Here's the game designer-type answer to why AOO are difficult for some players to grasp.
1. AOO are not intuitive. Sure, I've been playing 3E since it came out and understand it well enough but for most players in any game, you want the rules to be intuitive.
2. Anything that requires memorization of a list will doom the game for casual gamers. Even if you and I think the list is simple enough, the average casual gamer will always have to look some things up and that gets annoying.
3. D&D combat is not meant to be an exact simulation of actual combat. It is meant to be only a representation. Thats why designers tell us that a round consisting of 6 seconds is made up of several moves feints and parries that are all summarized in 1 d20 roll. AOO contradicts this by moving from a "macro" ruleset to a "micro" ruleset. When you think of D&D combat rules, you have to admit, that AOO is a very different sort of rule. It sticks out as "something extra to worry about".
Ultimately it comes down to the willingness of players to put forth effort into learning this rule. If I were to kick out every player who doesn't fully understand AOO, I'd be left with me DM'ing with only two players. The other three players really don't care to understand it. Same goes for grappling rules for that matter. Players will often steer clear of grappling for fear of having to pick up the rulebook.
If you want an exact tactical combat system, try another RPG. D&D does this weird thing of trying to combine a simplified combat system with an exacting rule. This is ultimately a design flaw. Its not wrong per se, but the reason that it is a design flaw is that it will not be fully understood by all players.
Further proof: I've played chess casually and very often when I use the impasse rule people get confused and think I've played wrong. Experienced chess players know it but casual players often don't because it is one layer of complexity away from the rest of the ruleset. (In case I've spelt it wrong, impasse is the rule that allows a pawn to move forward one space and still take an opponent's piece that is diagonally away from it).
Hope that helps.