Too close of a friend ???

So there's this girl that I liked and what not and I finally mustered some strength to talk to her. Actually we've been friends for some time, almost 2 years now. She lives about 4 hours away though so we're mostly phone/facebook friends. We've met quite a few times, she'll come down to my side with her friends, I'll go up there and what not. At one point, we became close friends, talking and chatting about all sort of things for hours. We would talk for hours, day or night.

So what took me so long to talk to her? The timing was never right. When she was single, I was involved, when I was single, she was involved. The one time we were both single was when we just met and I didn't know much about her yet. Now we're both single and we just saw each other recently so I figured I'll let her know how I feel.

Well, I did and she responded with the line of "I see you as my very close friend". So I decided to give her some time to let it sink in. We still talked, not as much as before though, cracking our normal jokes as if nothing happened but the topic had to come up again so after all the jokes one night like 2 weeks later, I brought it up. I mean I couldn't act like I didn't tell you something and we can't ignore it forever. She maintained her stand of her not seeing me as her boyfriend because we're close friends. I even tried to swing it saying well, wouldn't you rather date someone you know well than someone you don't know well but she won't change her mind. She just didn't think of me that way. Of course she had the excuse of being a first year med student (ok, I'm in grad school too so???).

When it looked like it wasn't working in my favor, I dropped the topic, closed the discussion and went back to the "friend" mode. My gentle and good side won't force the issue. But this is what I don't get - what is wrong with dating someone you're close to? We're not even close like that, we don't talk about sex (not in details like that) and we never talked much about our exes sef, so it's not like I know all the nutty details about her, plus we don't even see that often, may once every 4 months and sometimes, we only talk like once a week. Even on facebook, we don't talk that much besides making crazy comments on each other's pictures or writing normal wassup on our pages. One thing I can confirm is there was attraction from both sides. Maybe she lost hers' along the way, I don't know but there definitely was attraction.

So if someone can explain this "close friend" phenomenon, please break it down for me.
As for the girl, I've fashied that topic. I'm not going to be forcing anyone for anything. Maybe I'll even save some gas money sef.

Also, I should mention, I'm not looking for advice o, I just need to understand this 'cant date my close friend' phenomenon, maybe the ladies can explain why close friends can't be boyfriend. Guys are welcome to drop their explanation also.