For me it was the realization that my life was not a tidy, tree-like thing which could be neatly organized into separate buckets like that. Embracing iPhoto means being able to, in less than a dozen keystrokes, see every picture I've ever taken that has both my girlfriend and my mom in it.
Trying to enforce some rigid hierarchy on your photos makes that sort of 90 degree photo browsing and searching completely impractical.
What's a photo "about"? Is it just one thing? Is the content of a photo inexorably tied to just one thing? Is this photo a picture of "Jen's Graduation" or is it a photo of "Jen when she had short hair" or is it a photo of "Summertime, outdoors, when I lived in Indiana"? The reality is that the photo is all three things and many more.
The direction Apple appears to be headed with iPhoto, much like they've already done to our music in iTunes, is to break loose from the artificial order we try to impose and provide a more organic method of interacting with our photos that ultimately leads to a much more involving experience.