I suspect it comes from the judgments of others. When others judge us, it is natural to deny their judgments, for those judgments diminish us and make us feel more worthless. When one is addicted, everyone judges you, generally as a moral failure who cannot control your own passions.
No one wants to admit they can’t control themselves, for that makes them nothing more than animals. It takes away their humanity.
To overcome it, you need to accept the addict. You need to acknowledge and support their humanity. That doesn’t mean having anything to do with them. It just means that you do not judge them. You see to understand them as you would any other human you respected.
If people are respected, they can face their own dysfunctions without feeling like failures; without feeling worthless. They can identify the things they want to change on their own, without the crowing righteousness of others getting in the way. No one wants to admit someone else was right when that righteousness ends up with them being diminished. Most people hate being judged.
People must choose to change. They need support. Being attacked by others does not help.
AA groups work because they take the blame of self away. You must first admit that you have no control. Then they work because they surround you with others like you who do not judge you and who support you by sharing their experience. In this way, once people get it, they can stop denying. They no there will be no shame in being the way they are. And once the shame is gone, they can start to work productively to change their behavior.
AA has no monopoly on these techniques. Anyone could do it, and you don’t need a higher power to do it. That’s just part of the AA culture, and it’s fine. It works for many people. The problem is getting people past the denial that the external culture generates through it’s judgmentalism, so they can come in the door to a group where they can learn to help themselves. There can be much shame to overcome in going to a group like AA. Unfortunately, that will not change any time soon.
There is a another factor in denial, too. That is, that despite the problems of the addictive behavior, it also has benefits. Generally that benefit has to do with coping with pain. An addictive habit makes a person feel good. They like feeling good. It’s better than feeling bad. Duh.
Often they will deny the addiction is a problem because to say they need to stop the addiction is really scary. They have no idea how they will cope with the pain without the addiction. So this makes people deny the addiction is a problem. Rather, they see it as a solution.
The way to overcome this is to teach people other ways of coping with the pain.