I guess it's because service is subjective, I experience that every day and look at the comments on any thread about tipping or service and you'll see that people's expectations differ wildly.
Some here say they prefer the basic of acknowledgement, order taken, food delivered, bill delivered and they'd tip for that done politely and with a smile, others feel that going above and beyond is the reason you'd tip, personal and engaged service with a bit of a performance. . And you've also got those who think that good service is only delivered so a tip will be forthcoming and therefore dismiss it as fake.
Part of good service is reading people and tailoring the service to that customer as much as you can, because no one size fits all.
What you might think is amazing and attentive service I might think doesn't go far enough, and the next person thinks is overbearing and in your face. I have had differing opinions on my service from the same table - they've all had exactly the same service, but each person has a different expectation.
That's actually quite difficult to do, bearing in mind you've likely never met the people and have maybe a minute to size up their expectations based on a very limited interaction.
So in essence servers are 'rewarded' by being tipped when they get it 'right' and not when they get it wrong.
Cynically you might say it is about feeling powerful on the behalf of the customers - being able to control how someone interacts with them financially, and a way for business owners to cut costs and manage staff when employing people.