Why would humans reject the paradise Matrix?

Because perfection is boring and happiness is relative.

In a world where "everyone is happy" eventually no one will be - at least in theory. Smith was on to something when he said that humans define their reality with misery.

I don't know if that's 100 percent accurate, but I do know that most people's happiness level is relative to the people that they compare themselves to. Multiple studies have suggested this despite how intrinsically flawed this thinking might be.

Another problem with a world where everyone has everything they want is that humans cannot be pinned down like that. Smith says that some of the Machines thought the perfect world that had been provided was flawed because they lacked the means to program it. There might be some merit to that theory too. What's perfect for one person might be miserable for the next.

Ultimately, it boils down to the same problem I have with the concept of Heaven - it shouldn't be a "perfect" place. There should be challenges to overcome and room for learning and growth. If everything is always as good as it's ever going to get, then there is never anything to look forward to. There is no way to feel a sense of accomplishment if failure is never an option. Is it always sunny and warm? Maybe I like it cold and rainy once in a while. How can you appreciate the sun if it's ALWAYS sunny?

Apart from boredom and feeling uneasy about living in a false paradise, the fact is real freedom is essentially nonexistent. As miserable as the real world may be, the thought of being a slave to the machine can't be the easiest thing to accept, so choosing to have at least SOME control over your life would understandably be the best thing. And hey, there's probably a good chance you'll end up getting killed in the Matrix if an agent takes over.

You want something corny? You got it!

Here is my interpretation:

In the context of that discussion, the Architect was discussing which form of the Matrix was best for keeping people contained, not the best for keeping people happy or giving them what they want.

If you are living in a paradise with all your needs and wishes taken care of with no effort, what are you going to spend all day doing? Probably just hanging out and relaxing and thinking. Its very likely that you will spend a lot of time thinking about very existential things and questioning the world around you. Stuff like that is what leads people to breaking free of the Matrix.

Compare that to the average human living in the 1999 Matrix. There are unlimited distractions in 1999. You could spend your whole life running in the rat race and paying bills and watching mindless tv and never think about the things that lead to breaking free of the Matrix.

I'll put it this way... A long time ago I realized I'd be happier if I were devoutly religious, and believed that a deity was watching over me and protecting my interests, and who would reward me for being a good person. But I'm still agnostic, I have no Faith, I just can't make myself believe something because believing it would make me happy. My brain stubbornly insists on believing what it perceives as the truth, and gives no weight to belief that don't pass its smell tests, no matter how beneficial holding that belief would be. I suspect I'm not the only one.

And it's not like the Matrix world actually made anyone happy, when Neo lived in that world he was as disgruntled and lonely as any cubicle drone.

Have you ever met people? They are a mess of insecurities that purposely wreck their own lives to have the miserable dynamic they prefer. The majority of them need therapy and the ones who dont improve need to be put down like dogs.

Boredom, same reason people reject the world today. Most of them are dumb animals, without the pressures of survival they become bored and seek new experiences, something not possible in a perfect matrix.

Because the writers had to account for the world as it really exists to us. No sense trying to come up with some deeper meaning.

The Matrix is basically a massive video game.

Games have to have challenges, goals, conflict, stakes, and consequences in order to be fun. Ask any gamer what happens if you play a game with all the cheats unlocked? It's fun for about 5 minutes and then becomes massively boring and unplayable.

A paradise version of the Matrix would suffer the same fate. People would lose their shit quickly.