I know that it does consider ' ' as NULL, but that doesn't do much to tell me why this is the case. As I understand the SQL specifications, ' ' is not the same as NULL -- one is a valid datum, and the other is indicating the absence of that same information.
Feel free to speculate, but please indicate if that's the case. If there's anyone from Oracle who can comment on it, that'd be fantastic!
Indeed, I have had nothing but difficulties in dealing with Oracle, including invalid datetime values (cannot be printed, converted or anything, just looked at with the DUMP() function) which are allowed to be inserted into the database, apparently through some buggy version of the client as a binary column! So much for protecting database integrity!
Oracle handling of NULLs links:
http://digitalbush.com/2007/10/27/oracle-9i-null-behavior/
http://jeffkemponoracle.com/2006/02/empty-string-andor-null.html
I believe the answer is that Oracle is very, very old.
Back in the olden days before there was a SQL standard, Oracle made the design decision that empty strings in VARCHAR/ VARCHAR2 columns were NULL and that there was only one sense of NULL (there are relational theorists that would differentiate between data that has never been prompted for, data where the answer exists but is not known by the user, data where there is no answer, etc. all of which constitute some sense of NULL). By the time that the SQL standard came around and agreed that NULL and the empty string were distinct entities, there were already Oracle users that had code that assumed the two were equivalent. So Oracle was basically left with the options of breaking existing code, violating the SQL standard, or introducing some sort of initialization parameter that would change the functionality of potentially large number of queries. Violating the SQL standard (IMHO) was the least disruptive of these three options.
Oracle has left open the possibility that the VARCHAR data type would change in a future release to adhere to the SQL standard (which is why everyone uses VARCHAR2 in Oracle since that data type's behavior is guaranteed to remain the same going forward).
Tom Kyte VP of Oracle:
A ZERO length varchar is treated as NULL.
'' is not treated as NULL.
'' when assigned to a char(1) becomes ' ' (char types are blank padded strings).
'' when assigned to a varchar2(1) becomes '' which is a zero length string and a zero length string is NULL in Oracle (it is no long '')
Oracle documentation alerts developers to this problem, going back at least as far as version 7.
Oracle chose to represent NULLS by the "impossible value" technique. For example, a NULL in a numeric location will be stored as "minus zero", an impossible value. Any minus zeroes that result from computations will be converted to positive zero before being stored.
Oracle also chose, erroneously, to consider the VARCHAR string of length zero (the empty string) to be an impossible value, and a suitable choice for representing NULL. It turns out that the empty string is far from an impossible value. It's even the identity under the operation of string concatenation!
Oracle documentation warns database designers and developers that some future version of Oracle might break this association between the empty string and NULL, and break any code that depends on that association.
There are techniques to flag NULLS other than impossible values, but Oracle didn't use them.
(I'm using the word "location" above to mean the intersection of a row and a column.)
I suspect this makes a lot more sense if you think of Oracle the way earlier developers probably did -- as a glorified backend for a data entry system. Every field in the database corresponded to a field in a form that a data entry operator saw on his screen. If the operator didn't type anything into a field, whether that's "birthdate" or "address" then the data for that field is "unknown". There's no way for an operator to indicate that someone's address is really an empty string, and that doesn't really make much sense anyways.
Because not treating it as NULL sucks, too. If you make a mistake in this area on Oracle, you usually notice right away. In SQL server, however, it will appear to work, and the problem only appears when someone enters an empty string instead of NULL (perhaps from a .net client library, where null is different from "", but you usually treat them the same).
I'm not saying Oracle is right, but it seems to me that both ways are approximately equally bad.