Research indicates that the ball is only in contact with the paddle for 2-3 milliseconds. Humans are unable to process visual images in that time frame. The problem with the "Paddle above the wrist" rule is that it for many side arm servers it is pretty much impossible to distinguish between a barely legal serve and a barely illegal serve. It simply happens too fast. Even if you do a slow motion video of some of these servers it can be hard to distinguish with certainty.

The tradeoff here is that it is really hard to hit the ball significantly above your waist and keep the the paddle head below your waist. (Exception: Lob serve) If you try to hit the ball above your waist and your paddle head below your wrist you will end up with an awkward "chicken wing" serve.