While the banding ability was never actually removed from the game, no cards have been printed that use the ability in any set following sixth edition and it has never appeared on any rules summary I've seen from the past several years. Why is this? I've heard it's because the ability was 'too complicated'. What exactly was so complicated about it that might have encouraged its extinction? What is a good situation/example that demonstrates why it was probably exiled from the game?
Take it from the horse's mouth:
The short explanation of banding is that if your creatures attack or block in a band, the controller of any creatures that deal combat damage to them doesn’t get to assign that damage -- you do. Pretty cool. Everything else about banding, though, elicits a “huh?” It works differently when attacking and defending. (In an attacking band of X creatures, at least [X-1] of them must have banding. In a defending band, only one creature must have banding.) A lone blocker could block multiple creatures if they were banded together. If an attacker with evasion (flying, swampwalk, whatever) is banded to a creature without evasion, the whole band can be blocked. Then it gets really complex: What if the only defensive creature with banding is destroyed before damage is dealt? What if my band of three attacking creatures, one of which has trample, is blocked by your band of three defending creatures, one of which has first strike?
The only answer I can give you is, “I dunno.”
Banding was an ability that was flavorful and simple enough in the simple cases. But when you left the simple cases and got into more unusual situations, the rules suddenly became very complex, unintuitive, and opaque. You wind up with a mechanic that cannot be understood or accurately applied simply by reading the text on the card and applying your general rules knowledge. Instead, you have to know a whole bunch of banding-specific rulings, and hope you have a copy of the comp rules handy if it ever comes up.
And all of this complexity is maintained for a mechanic that rarely actually mattered. I could be wrong, but I don't believe there is any card with banding that has ever been a tournament staple. Under these conditions, the best choice is the one that Wizards made, which is to let banding lay fallow and pretend the whole thing never happened.
The current official reminder text for Banding is as follows:
Banding (Any creatures with banding, and up to one without, can attack in a band. Bands are blocked as a group. If any creatures with banding you control are blocking or being blocked by a creature, you divide that creature's combat damage, not its controller, among any of the creatures it's being blocked by or is blocking.)
Yes, it's taken them 20 years to distil the "simple explanation" of Banding into that - and I bet you still can't tell what it means without reading it slowly and carefully at least three times.
Wizards has made it a bit of a rule of thumb, for quite a few years now, to remove complexity from the game where it isn't needed. Could the game survive with Banding, Phasing, interrupts and mana burn still in it? Almost certainly. Is it better off without them? Again, almost certainly.
The real nail in Banding's coffin is that you can get a similar flavour out of a much simpler rule. Take for example the en-Kor ability from Stronghold:
0: The next 1 damage that would be dealt to [this en-Kor] this turn is dealt to target creature you control instead.
This does almost everything Banding did - gives the owner some power to control how damage is assigned to his creatures. But with the great advantage of not causing your head to explode while trying to calculate how it works in complicated situations!
Wizards could make new cards with banding. But they have no reason to.
pussipiru asked: Do you ever dream of taking old unpopular set like Homelands, Fallen Empires or Mercadian Masques and remaking it to be cool?
No. Designing something to prove that you can is a horrible motivation for design.
Could Wizards create new cards with banding that are fun, interesting, and understandable? Almost certainly. But doing so would require a great deal of effort for very little gain.
Even with the streamlining that came with the M10 combat rules update, banding is a complicated ability - not because the affects themselves are complicated but because of the number of different variables that it has to interact with.
The audience who would appreciate a creature with banding for the sake of being a creature with banding, and is greatly outnumbered by the number of players who would dislike the creature because of previous experience with banding, or because of its reputation. And the mechanical purposes that it serves can be fulfilled by other abilities which are easier to understand.
Magic's 25 year history gives it a lot of mechanics to choose from when making new cards. They have the luxury of being able to choose to reuse only the mechanics which are popular and useful. Banding is neither, and so they don't use it.
I still don't get the difficulty. I don't know if this was just our house rule back in the day or if it was explicitly stated but everyone I knew back in Alpha and Beta days unless all creatures in a band contained a keyword ability then any who had that keyword lost it for the duration of the band.
So in the examples provided, the creatures with trample and first strike lost those abilities the instant they were added to the band. Also once the band is declared it lasts until the end of the turn, so if you take out the only creature with banding in a band the band remains.
The one complexity that existed which could have been completely removed by a rules update was it working differently on attack and defense, just make it so that they are the same requiring all creatures in a band but 1 to have banding regardless of whether you are attacking or defending.