I think a lot of people have trouble understanding the concept of expenses as they relate to revenue (or in this case savings). It is fairly common to see people go to the casino with $100, leave with $40, and say they won $40, not understanding the actually lost $60.
I see this often enough that there has to be some haywire brain function left over from our more primitive evolutionary period. It cannot just amount to stupidity.
I don't think it's stupidity or some haywire brain function. I think it's a combinations of many things:
1) Money management is a learned skill, just like anything else. Nobody comes out of the womb knowing this stuff.
2) People learn by example, especially as impressionable children. If kids see broke parents perpetually mishandling money, that's probably how they'll do it too until they either get so frustrated that they actively seek out a better way, or accidentally stumble across blogs like MMM or books like Your Money or Your Life and something "clicks". I think in some sense, it's like a drug or alcohol addiction: people won't change until they hit rock bottom...and even then a lot of people won't because they don't believe an alternative is possible.
3) We do a terrible job of teaching basic personal finance skills in this country .
4) We live in a math-phobic culture and it's getting worse. I struggled with math as a kid, but I can tell you that I was a veritable Einstein compared to many kids today. I know basic financial skills don't require higher levels of math, but the vast majority of kids (at least in my experience working at a community college) graduate high school without even the most basic math competencies.
5) We live in a culture where a good percentage of the population seems to value anti-intellectualism at all levels. So you don't want to study math, science, or acquire critical thinking skills, lest you be labeled a pointy-headed elitist intellectual. Chances are good that if you don't value those other skills you're going to bumble around with your money too.
6) This is all complicated by the fact that we are bombarded with zillions of advertising images every hour/day/week. Everyone believes they're immune...but no one really is.