It's because of the mechanics of a circle hook. If you will imagine the path it takes, from near a fish's throat (fish don't usually chew much after hitting a bait: it's bite and swallow) to the corner of the jaw, all while it's mouth is closed, you'll notice that there's a lot of soft tissue (like the tongue and "cheeks") to get hooked on.
A sharp, offset circle hook (like a Gami Octo-circle) will snag on the soft tissue and result in a quickly shaken hook-up. This is probably why Gami Octo-circles tend to get fish shaken off in the wash...this is when the forces of the current and gravity are at their strongest on the fish's mouth, therefore the most likely to rip the hook out of the soft tissue.
The reason a (relatively) small gap, non-offset and slightly dull circle hook is better for the hookup is due to the fact that it can travel the path from the fish's throat to the corner of the jaw without hooking any soft tissue. However, when the hook is pulled tight against the corner of the jaw, the circle hook "snaps" into position on the jaw hinge and gets lodged in the bony area. The bony area of the jaw hinge is very strong, as it is bony, with cartilaginous connective tissue, not soft skin.
As a side note, I've noticed that a lot of stripers are hooked in lower jaw with circle hooks and cut bait while drum are usually hooked in the corner. I have a theory for this: stripers usually cruise a few feet above the sea floor while drum tend to hug it pretty tight. When a striper picks up a bait on the sea floor (like off of a FF rig), the fish is at an angle, with the head down and the tail up. As it swallows and swims off, it swims forward as it goes back to cruising "altitude", with the leader trailing beneath it as it slides through the sinker slide. The mechanics apply and the hook tends to catch the bottom jaw. A drum's body tends to be fairly parallel to the sea floor, and fairly close, so that when it hits a bait and swims off, the leader is trailing beside it leading to a hook-up in the jaw hinge.