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The Olympics are small potatoes in the soccer world. The World Cup is far more meaningful.
There are a lot of soccer politics involved as well. FIFA does not want the olympics (and the revenues that goes to someone other than FIFA) diluting the World Cup. The major clubs that pay the best players huge salaries do not want their best players being worn out during the off season (this is already a huge problem with World Cup qualifying and international friendlies).
FIFA gets it's way because they control professional soccer. If they want, they could prohibit all professional players (at least those who want to continue playing in the professional leagues FIFA controls....which is all of them) from playing in the Olympics. The Olympic committee knows this, so the agreed to a compromise that uses youth and overage players.
As for Beckham, he is still a very good player (he helped the MLS LA Galaxy win the MLS cup last year) and one whose passing/distribution England missed dearly against Italy. The problem is that he no longer can cover ground like he did when younger (he was once considered the best conditioned player at Man U), which limits him to deep midfield position from which he is still one of the best playmakers in the world, but a below average defender....and poor defenders at deep midfield positions is not something you can get away with at the highest international levels. He would help England offensively but hurt them too much defensively.
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