Everyone seems to have come up with almost all the examples I had of why it makes more sense to define it to be 1 than 0. (I have one more, below.) But the bigger issue is pretty close to what Dustin and FatPhil said just above. In math, more or less, we can define things the way we like (really!) as long as we're consistent once we define it. But if you pick a "bad" definition, then you won't be able to prove any nice theorems about it. Put another way, pick your definitions to match the hypotheses or conclusions of interesting theorems so that the theorems are easier to state. (Not because we're lazy, but because that means it's an interesting condition you've identified.) In cases where there might be more than one possible good definition, then you may start your exposition with saying which definition you are choosing.
This sounds a little strange at first: Shouldn't we just think of the definition, and then apply it the same way we first thought of it forever? That might make sense if the goal of mathematics were to be rigorous just for the sake of being rigorous. But the goal is really to find interesting implications (theorems), and changing (over time) what you think of as the "right" definition lets you do this better, as you discover more interesting theorems. (Three good examples of definitions that changed over time: polyhedron, to fit Euler's formula; function; and what it means for a function to be continuous.)
At the risk of opening more cans of worms, here are two simpler examples. Draw a perfect square. Now, ask yourself, "Is this a rectangle?" When we are first learning shapes, we would say, "no, it's not a square, because it's a rectangle." But later, when you get to say high school geometry, it turns out to be much more convenient to say that square is *also* a rectangle, because then theorems about rectangles do not need to have special cases for squares. Example: If you draw two different diameters across a circle, then the 4 points where they intersect the circle form the vertices of a rectangle. If squares didn't count as rectangles, then we'd have to say "draw two different diameters *that* *are* *not* *perpendicular*".
Second simpler example: Why do we say that 1 is not prime? Because we like the Fundamental Theorem of Arithmetic which says that every number has a unique factorization into primes (unique up to not worrying about the order of the factors). If 1 were prime, then, 15 would have infinitely many factorizations: 3 x 5, 1 x 3 x 5, 1 x 1 x 3 x 5, etc.
Finally, here's my one last reason for saying 0^0=1. The binomial theorem says that (x+y)^n = sum_{i=0}^n (n choose i) x^i y^(n-i). If we put in x=0, then the theorem is only true if 0^0=1 (for the i=0 term). Also the same sort of reasoning explains why (warning: more worms) we usually take 0!=1; it makes the binomial theorem work.