OK, being objective here. Really. Just hear me out ok?
Killing Jenny had an impact on Buffy (and us viewers) that killing Oz couldn't have had. Oz was around for only five or siz episodes at that point, and his relationship with Willow was very new. I think it wouldn't have been believable to kill Oz and Willow go through the pain and torment that Giles went through when Jenny died? Why? Because Willow had only known him a short while. She didn't even really cry over Jesse being dead, who she had known a lot longer. Killing Oz would have been sad, but not devestating (I don't think many of us would have loved him to quite the same extent.)
On the other hand, instead of killing a friend's love interest, Angelus went after Buffy's *watcher*! To have the man she loved torment the man she trusted most was, IMO, brilliantly heart-wrenching. I don't think you could have gotten there if Willow had been the primary sufferer. True, Willow and Buffy were best friends, but I just think that hurting Buffy's parental figure was so much more resonant that hurting her peer.
In the end, Joss always goes for the most heart-wrenching thing possible. It was definately Jenny, not Oz, that would cause the most anguish.
But, I guess that's your point.