-They remember pain of trying to find an error in a code, data, or config file that had significant whitespace. Consider the 'tab-delimited' spreadsheet format, for example. If you manually edit a tab-delimited list of numbers, and accidentally leave a space somewhere, the number might be read as a string.
-They've spent a lot of time dealing with HTML rendering, where whitespace gets mangled and cannot be trusted.
-They're afraid they won't be able to make their code readable.
-They're afraid that the whitespace rules will be complicated, requiring them to think constantly while adjusting to this newfangled way to delimit blocks.
It is also true that Python has survived already, but I doubt this concept would leak to new languages.
Upd: In other words, it's electronic typography that made the space character irrelevant.