I can think of only 3 reasons myself, perhaps there are more.
1. Childhood dream - Even though this is a business decision, some kids are just drawn to their favorite school and next to nothing is going to change that. And if that is the case, I will never hold that against a kid for playing for his favorite school. I may not agree with it... But I respect it.
2. Playing time/roster limitations - You may even throw in ego here as well. Some kids just want to be "the man" on campus. But if a roster has limitations and they feel they feel they are good enough to be on the floor more and don't want to have to fight for their PT then going the easier path is for them. It won't help them in the long run most of the time but they don't see it that way.
3. $$$$ - As we've seen money plays a huge part in many of these kids recruitment. Yes, it is short sighted because if they look at the results of UK kids in the NBA vs. even the next closest school they would see a huge jump in dollar signs. However many of these kids come from needy family's and as such even a little money in the present is worth taking the chance on their future.
With that said, I can see the appeal of Izzo for some of these players. He is a blue collar type of coach that has a history of coaching tough players. Some kids see themselves as that type of player and find that type of play style appealing. They simply aren't looking at it from his NBA prospects resume.