Because too many people were pretending to be family with random strangers on the other side of the planet to essentially get free games.

Steam checks the login location history of anyone you try to invite, if they did not login at your location in the last few months the invitation is declined.
As a workaround, next time you visit your Dad or he you (or any OTHER way your accounts could log into the same PC, cough), just log into the same PC with your Steam accounts right after each other, then resend the family invite.
It will now work since your last login location was identical.
Once you are in a family it no longer matter from where you login, i have Steam Family members that live on the other side of the country by now and it still works fine.
Its just the initial invitation that is so strict, after that as long as you are in the same Steam Store region it does not matter where everyone physically lives.

There are a lot of circumstances involved, people know that, and they used them as excuses to abuse the family share system. That is why the current one is so strict.

You may thank the people who abused the system.

Steam family forums are here that talk about it:

https://gtm.steamproxy.vip/groups/steamfamilies/discussions/

Too many people abused the system sharing or even selling their family share slots and steam had to implement this rule to keep the game companies happy or they would no longer use the service.

Originally posted by VynashDawnheart:

I'm trying to share my library with my brother. My parents got divorced years ago, and when my Dad got remarried, they had my little brother. I live in Utah, he lives in Ohio. Yes, I know it's not the "same household", but why can't I choose to share my games with someone in my family?

This is not a new phenomena, split households have been a thing for a long time now. Kids go to college, too. The "household" restriction is an arbitrary line, and is unfair to kids, and people, that are already going through a tough time. Can we please look into verified ways around this?

Looks strikingly similar to this post

Originally posted by The Living Tribunal:

Originally posted by VynashDawnheart:

I'm trying to share my library with my brother. My parents got divorced years ago, and when my Dad got remarried, they had my little brother. I live in Utah, he lives in Ohio. Yes, I know it's not the "same household", but why can't I choose to share my games with someone in my family?

This is not a new phenomena, split households have been a thing for a long time now. Kids go to college, too. The "household" restriction is an arbitrary line, and is unfair to kids, and people, that are already going through a tough time. Can we please look into verified ways around this?

Looks strikingly similar to this post

Almost like broken households are fairly common in today's world, and this restrictive system hurts on top of the pain of the divorce.