- you need to write same variable name on each step of derivation of a formula
- paper and blackboards don't have autocomplete
- juxtaposition is used for multiplication, thus SwapBlue can be Swap times Blue or a single variable called SwapBlue, spacing for multiplication is not a good solution when writing to board/paper
And despite lambda calculus being written entirely using single letter variable names, Scheme programmers all use proper word-size variable names in their programs.
Mathematics notation is so notoriously awful that mathematicians often can't even read equations from other disciplines without significant extra context.
Edit, see http://mathoverflow.net/questions/8295/origins-of-mathematic... for the confusion this causes..