I just went through the iTunes "forgot my password" process and had a different experience. According to that box to the side, my new password passed all their requirements, yet on submit it kept rejecting it. I finally got it to accept a password when I stopped trying to use spaces. Are there other characters their back end rejects that the front end allows?
Apple's entirely inconsistent in this: IIRC I've been able to set simple passwords if I reset my Apple ID password through a certain page, but am forced to use a complex password if I reset it through a different page. (Such as id.apple.com vs. store.apple.com vs. developer.apple.com) I can't remember which is which, but I remember coming to this realization multiple times.