Both Seoul and Taipei cower at the possibility of upsetting Beijing (and in Seoul's case under Roh, Pyongyang as well), and this just gives Beijing more power. This ticks off "C," a Taiwanese grad student I know here in Hawaii who formerly worked in Pan-Green (泛綠聯盟), the independence-minded political coalition that was recently voted out of power.
What would Beijing do if Seoul or Taipei allowed the Dalai Lama to visit? Would they invade? Would they cut off economic ties, which is largely Taiwanese and South Korean companies dumping investment dollars into China while buying up goods from Chinese companies? Would the instigate a series of policies that give their ally North Korea free reign to do whatever the hell it wants even when it runs counter to international acceptability? Too late, they already do that.
Really, then. What do Taipei and Seoul have to fear but fear itself? Let's pull that Band-Aid off, people!