It's because of the way that Google stores a page's data, and the way that they process a search query.
Google's Regular index consists of two indexes - the short index and the long index. They are also known as the short barrels and the long barrels. The short index is also known as the "fancy hits" index. Google also has a Supplemental index, but that's not part of the Regular index, and it's not relevant to this topic.
The short index is used to store the words in link texts that point to a page, the words in a page's title, and one or two other special things. But when they store the link text words in the short index, they are attributed to the target page, and not to the page that the link is on. In other words, if my page links to your page, using the link text "Dallas hotels", then the words "Dallas" and "hotels" are stored in the short index as though they appeared in your page - they belong to your page. If 100 pages link to your page, using those same words as link text, then your page will have a lot of entries in the short index for those particular words.
The long index is used to store all the other words on a page - its actual content.
And here's the point...
When Google processes a search query, they first try to get enough results from the short index. If they can't get enough results from there, they use the long index to add to what they have. It means that, if they can get enough results from the short index - that's the index that contains words in link texts and page titles - then they don't even look in the long index where the actual contents of pages are stored. Page content isn't even considered if they can get enough results from the link texts and titles index - the short index.
That is the reason why link texts are so powerful for Google rankings. They are much more powerful than page titles, because a page can have the words from only one title in the short index, but it can have the words from a great many link texts in there. That is the reason why one man's page ranks #1 for "miserable failure". All the link texts from all the pages that link to this man's page using the "miserable failure" link text, are in the short index - and they are all attributed to HIS page.
Page titles are the second most powerful ranking factor, because they are stored in the short index.
