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Ireland and the UK share an open-border area just like the Schengen countries, but unlike the Schengen area they lack a common short-term immigration policy. As a result, pretty much anyone can obtain an Irish visa and cross to the UK unhindered (and vice versa) but doing so is technically illegal.
Why can't the two countries agree on a common list of visa-free nationalities and issue a single visa for both countries?
TL;DR: Because, at the moment,
There are plenty of things you can do that are illegal. You can start most cars despite having a high BAC, and drive until you get caught. You can carry a knife in your bag through downtown London, and get away with it until you're nicked. The same thing applies through most of the legal code.
You're apparently confused because, apart from Latin American entrance into the United States, crossing international borders is not usually one of those things in the 1st World. It's usually just completely impossible to get an international airline ticket, go through security, fly, and get out of security without fairly valid paperwork.
When Irish terrorism was a problem, this wasn't possible. With most of it dealt with, the borders opened again. In fact, demilitarizing the border and removing checkpoints were a major part of the Good Friday Accord. Most political leaders were—before Brexit—doubtless expecting that travel around all the countries of Europe would become freer and freer with the fulness of time.
You still can't just go to Heathrow and walk onto a London bus with an Irish visa. You'd have to travel to Ireland, cross the border on land, and travel from there to Britain by some means lacking a visa check (read: ferry). To be safe, you'd need to go the same way to head home. Now, that system is very weak w/r/t determined terrorism (especially since Ireland isn't one of the Five Eyes & the UK can't trust its passport control) and there have been efforts to introduce visa checks between Northern Ireland and Britain. It's a nonstarter for Northern Irish politicians, who've been coalition partners with the ruling Tories for years. Control could be quickly imposed on ferries and other methods of travel but the inconvenience to the locals far outweighs the current perceived need to police the visitors, particularly with the Northern Irish punching above their weight in Parliament.
On the other hand, Brexit was a specific repudiation of greater openness and less native control over borders and immigration. It was a very close-run thing nationally but the rank-and-file British conservatives were strongly in favor overall. There's no strong push to make it marginally easier for Irish visitors to cross over, when
the local Northern Irish have it fine;
plenty of people easily apply (and pay) for British visas;
no, really, plenty of people: Britain welcomes 5* the Irish population as visitors every year versus Ireland getting about a fourth of that, with many visiting because they happened to be nearby in Britain anyway; it's Ireland fighting for a share of the UK's market and tourism revenue, not the other way around;
there haven't been any hordes of foreign poor spilling across from Ireland;
there haven't been major terrorist attacks allowed by the current system; and
the British public would read the changes necessary for a full visa union between the UK and Ireland right now as a further attempt by Whitehall & co. to undo Brexit.
You might see movement on this one way if Corbyn really pulls the British government hard left, since Labor always hated Brexit and illegal immigrants can be expected to vote for someone other than the Tories; you will see movement on this hard the other way if the Tories hold power and it becomes public knowledge that a major terrorist attack or several were permitted by the open Irish border; but for the near future it looks like things will continue to muddle on as they are now until the Brexit negotiations force a decision.
The Common Travel Area is rather different from Schengen area. It has a different history and a different purpose.
In the 1980s and before there was a very hard border between the Republic of Ireland and Northern Ireland, with military guards and barbed wire. While the UK and Ireland were both members of the EU and could travel freely to each other's countries, actually crossing the border would mean going through a lot of security checks. It was one of the principal requirements of the Good Friday process that all such checks would be removed at the UK/Ireland border.
The UK and Ireland have different immigration policies as they have different immigration needs. Irish workers have often seen emigration as a solution, resulting in skills shortages in construction and other areas. source. Ireland has roughly neutral migration numbers source. The UK has different requirements, and has had net immigration for many years now.
So, there are different interests and requirements. It would not be politically acceptable for the UK or Irish government to converge on a single immigration policy. This does leave seeming paradoxes, such as requiring a visa to enter the UK, but no infrastructure at the border to check visas.
That said, there have been steps to rationalise this situation, with Indian and Chinese visitors able to get a single visa for both countries, under the British Irish Visa Scheme.
One major reason why they can't agree is that Ireland is very pro EU (>90% support) and the UK is heavily divided on the issue to say the least.
Being pro-EU means accepting freedom of movement of labour, something that many in the UK oppose. Therefore the UK would be reluctant to adopt Irish/EU immigration rules, and Ireland would be unable to opt out of them unless it also left the EU which clearly isn't very likely.
