Why does diluted half & half not make a substitute for whole milk?

The difference between whole milk (or any milk, really) and half-and-half is one of fat content, not overall concentration. Half-and-half gets its name from being a 50/50 blend of milk and cream, which normally separate because the less dense fats concentrated in cream float naturally to the top of the mostly-water milk. However, milk also contains a number of other proteins, sugars, etc. that give it flavor. When you dilute half-and-half with plain water, you're diluting the fat content (potentially down to a similar range as contained in whole milk) but you're also diluting all those other flavorful components. You wind up with something that has the right fat level but not enough of anything else, and which tastes somewhat flat and flabby by comparison with proper milk.

I've done some experimentation on this topic and I've come to the conclusion that one of the main flavors missing is sweetness. If you look at the sugars in half & half they are usually lower to start with than whole milk. When you dilute it to try to match whole milk you end up with quite a bit less sugars in the final product, even if concentration of milk fat is about the same as whole milk.

Adding in some sweetener to the diluted mixture makes the flavor much closer to that of whole milk. The actual amount of sweetener depends on the type of sweetener and your individual taste. A tiny bit of salt can also help. It's difficult to obtain a perfect match but you can get pretty close with this trick.

The reduced sugars can be exploited if you're on a low glycemic diet, substituting diluted heavy cream, half & half, or other high milk fat ingredients for other types of milk, then adding in lower glycemic index sweeteners.

Pretend milk is Kool-Aid

The cream is sugar and the Mr Strawberry is a powder with strawberry taste but no sweet.

I am supposed to mix 1 pack Kool-Aid, 1 cup sugar, and 1 gallon water. I mess up and put in 2 cups of sugar. If I dilute down the sugar with a gallon of water I get the sugar ratio correct but now the Kool-Aid ratio is 1/2 what it is supposed to be.

If you dilute half and half to get the fat ratio down you also dilute the other stuff. Half and half is not concentrated milk. If half and half was just remove half the water from milk it would work. Half and half is adding cream to milk to increase the fat content.

I don't generally drink milk and I have a small fridge, so I only by whole cream and water it down. This is primarily for baking and cooking, not drinking directly (I use almond milk for that). I don't want two (or three) cartons of dairy product in my fridge and I use heavy cream for sauces about 3 - 4 times a month. If you're just using it in small quantities, the preferred dilution of heavy cream to whole milk is 1 cream : 1 water. The appropriate mathematical ration is around 1 cream : 7 water to bring it closer to 5% fat content, but that will make the end result thin, cloudy water. Stick to 1:1 or 1:1.5 at the most and you'll be fine.

Its true its not quite whole milk by doing that, But I must say it gets pretty damned close. If you are not a milk connoisseur you probably wouldn't know the difference. There is a much more noticeable difference between skim milk, 2% or whole in general vs if you tried to make the equivalent of those by watering down half and half. If you are using it for something like cereal, or making chocolate milk or that glass of milk to dip your cookies in or anything else where it would be used in conjunction w something sweet or sugary; watering down half and half is a perfectly good substitute if you don't have milk on hand. It blends instantly and its consistency amazes me. You could probably fool a lot of people that it is milk if they didn't know because it basically is minus a slight difference in fat and sugar content.