It's definitely because of the hiatus; in Greek, there's no ambiguity because both vowels HAVE to be pronounced, whereas English that letter combination would more logically be thought to rhyme with "Joe."

However, I'm pretty sure that anyone who thinks that Zoe rhymes with Joe probably also doesn't know what a diaeresis is. They'd just think it rhymes with Joe AND is the name of a heavy metal band. :-)

We're not going to use the diaeresis officially, for the logistical reasons you have in mind, but I think it looks kind of nifty so I have been using it inconsistently in less formal contexts. Somehow it's hard to feel consistency is terribly important when you live somewhere where a single name might get transliterated into English three dozen different ways.