It's pretty much already been said why blood isn't allowed in the WWE. Health and safety issues of course, I think someone already mentioned Bob Orton bleeding all over The Undertaker some years back and then disclosing that he'd contracted a type of hepatitis in the past.
As Sly pointed out in his first post, there are various states that have extremely strict policies when it comes to blood. In Kentucky, there is indeed a no blood policy and any wrestling company that refuses to adhere to it can be banned from performing in the state. Now, I've been to some small indy shows here in KY and some of them do often ignore the policy. However, WWE & TNA are far too large to believe that they could get away with it. I'd be willing to bet there are similar clauses in a number of other states.
Since the death of Chris Benoit, the WWE has been placed under a tremendous amount of scrutiny. I know some want to kid themselves by saying that Benoit's actions have nothing to do with it. Must be nice living in Neverland. At any rate, whenever the news talked about this, you only heard the WWE being talked about. You didn't hear mention of the NWA or TNA or anyone else for that matter. They have the luxury of not being directly in the crosshairs since they're not nearly as big of a company. For all intents and purposes, the United States Congress threatened to bend Vince McMahon over a table and make him its bitch at one point. It scared Vince into taking the welfare of his wrestlers more seriously because if he didn't, somebody else would whether he liked it or not. Aside from all that, the WWE is a publicly traded company. The fact that the McMahons do own the vast majority of the stock doesn't mean that they don't have as much of a responsibility to other stock holders as the heads of any other company.
I don't need to see a man smashed in the face with barbed wire to enjoy wrestling, I don't need to see blood pouring down someone's face in order for me to think it's a good wrestling match. There's plenty of people doing that kind of stuff in their own backyards if that's what you have to have in order to enjoy yourself.
The way you hear people complain, you'd think that bloodshed was something that happens often in wrestling and that's simply not the case at all with most companies. If you're a fan of "hardcore wrestling", then I'd recommend just setting up something in your own backyard, pull some friends in, and go at each other with florescent light bulbs and boards with barbed wire nailed into it. The WWE has shown many times that you can have a good "brawl" without blood. Blood in general has played such a minor role in wrestling overall that I can't help but feel all this love of blood has a lot to do with some fans still being in an ECW frame of mind. I know that every match in ECW wasn't hardcore but, let's be honest, it's what ECW is remembered for and it's what ECW alumni tout whenever they talk about the good old days.