"For a 12oz pot of light oolong tea, use one to one and one half teaspoons of tea in 176˚-185˚ water for 30 seconds to 2 minutes". So what that means - that you don't wash the leaves at first? And the tea gets really to bitter if you brew it for 2 minutes. For example today I tried to do like that - to keep the tea for 2 minutes - it was not possible to drink.
What all that means? Why they are writing about that kind of style brewing? Why just not to do in Chinese way - use gaiwan and keep it only for some seconds, because it's just the best way.
Obviously, you're kind of preaching to the choir here. But to me, it's not so much as that one way is the "best" way, but more that different methods are appropriate for different times, places, and teas.
When you did a 2 minute brew, did you use a very small amount of tea (like the 1.5 tsp figure given in your example, which is probably only a few grams, even of a rolled tea like tieguanyin) and use a pot as large as the one described (12 oz)? If you're getting an undrinkable result, you're probably doing it wrong, or need to adjust the parameters somewhat, though some teas will taste better than others brewed this way.
I do think that brewing with cooler water, less leaf, and a long infusion gives a different result. In some cases, especially with low to medium quality tea, you will get a better result this way. I do prefer brewing tea in smaller amounts, but I have tried brewing the same teas Western style, and I don't think it tastes undrinkable. Also, it is harder to mess up - even after brewing gongfu style tea for several years, I brew tea that isn't to my own taste (or to others' taste) occasionally - by brewing tea in such a concentrated way, inferior tea, mistakes in brewing technique, etc. are all magnified somewhat. Knowing how a tea tastes brewed different ways (including Western style) is very useful, because you can make adjustments to maximize the potential of a particular tea. With a tea that's just Ok, often I will back off somewhat in terms of both temperature and leaf quantity, because I know that I am bringing out the best qualities that this tea has to offer.
Why don't people do it the way you describe? Probably a few reasons.
1. Lots of people don't even know about this method, and don't have, or couldn't easily get, the equipment needed
2. Vendors know that non tea people are often intimidated by brewing looseleaf tea. So their instructions are based on equipment and methods that are familiar to people, and likely to come up with a drinkable, if not amazing, brew
3. Many people, even in China, don't want a lot of fuss about their tea, and they don't want to keep boiling water, re-infusing tea -- they just want something hot and not-bad tasting to drink.
Try brewing competition style sometime -- using those little tasting sets... boiling water, 3 grams for 5 minutes or 5 grams for 3 minutes. To me, gongfu and competition style brewing are two sides of the same coin - they both stress the tea. Adherents of each method will tell you that their method is the best, but to me, it's more about sticking to a method long enough that it allows you to judge whether a tea is good or not -- like using familiar monitor speakers for a recording engineer - the speakers don't have to have the most accurate sound reproduction, as long as your ears are attuned to the way they shape the sound.