Well that's because vowels can have different pronunciations in English. We're talking about oo as in took, cook, book, or foot, not as in root or stoop.
But ö doesn't really have an equivalent in English. It's pronounced basically like oo in cook, but with a light vowel R throughout.
You know what's a really common word in German with ö in it? Möchte. Oh, ich möchte Eis essen! Anyone who actually knows how to -speak- the language isn't gonna say ich moochte. That's just dumb.