Why did they retain the diatonic system?

Yeah. If you have a specific question about theory, maybe you could restate it succinctly, because I'm really not sure what you're asking anymore.

from wikipedia:

History of notation of accidentals

The three principal symbols indicating whether a note should be raised or lowered in pitch are derived from variations of the letter B: the sharp and natural signs from the square "B quadratum", and the flat sign from the round "B rotundum".

In the early days of European music notation (4-line staff Gregorian chant manuscripts), only the note B could be altered (i.e. have an accidental applied to it): it could be flattened, thus moving from the hexachordum durum (i.e. the hard hexachord: G-A-B-C-D-E) where it is natural, to the hexachordum molle (i.e. the soft hexachord: F-G-A-B♭-C-D) where it is flat; the note B is not present in the third hexachord hexachordum naturale (i.e. the natural hexachord: C-D-E-F-G-A).

This long use of B as the only altered note incidentally helps explain some notational peculiarities:

* the flat sign actually derives from a round B, signifying the B of the soft hexachord, that is, B flat (hence the name of the flat sign in French "bémol" from medieval French "bé mol" — modern French "bé mou" — or "soft b") and originally meant only B♭;
* the natural sign derives from a square B, signifying the B of the hard hexachord, that is, B natural (hence the name of the natural sign in French "bécarre" from medieval French "bé carre", earlier "bé quarre" — modern French "bé carré" — or "square b") and originally meant only B natural.

In the same way, in German music notation the letter B designates B flat while the letter H, which is actually a deformation of a square B, designates B natural.

As polyphony became more complex, notes other than B needed to be altered in order to avoid undesirable harmonic or melodic intervals (especially the augmented 4th, or tritone, that music theory writers referred to as "diabolus in musica", i.e. "the devil in music"). The first sharp in use was F♯, then came the second flat E♭, then C♯, G♯, etc.; by the 16th century B♭, E♭, A♭, D♭, G♭ and F♯, C♯, G♯, D♯ and A♯ were all in use to a greater or lesser extent.

However, those accidentals were often not notated in vocal part-books (but the correct pitches were always notated in tablature). The notational practice of not marking implied accidentals, leaving them to be supplied by the performer instead, was called musica ficta (i.e. "feigned music").

This, combined w/the mention of the single tritone in diatonic vs. other 7 note scales in my second link above, is interesting in a semi to non related way:

http://www.medieval.org/emfaq/harmony/tritone.html

i solved this problem by never bothering to learn to read music.

m@tt wins.