Oil of oregano is an essential oil, it's just deluted in olive oil,so your incorrect in that. It's diluted because it's too strong to take on it's own.
Secondly, essential oils are used in the perfume industry, but not real essential oils. when i say real, i mean ones that haven't been extracted by chemical means or adulterated in some way.
Everyone is different, so maybe the oil of oregano didn't work on you, that doesn't mean it won't work on anyone else. You might not have had the real thing. oil of oregano has to made from the oil of an oregano plant from the meditteranean and must be wild.
I've used oil of oregano many times and think it's one of the most potent natural substances we have.
you shouldn't take oil of oregano on a daily bases, because it can effect liver function. for more information, i recommend you get the book advanced aromatherapy by kurt schnabault or his other book medical aromatherapy.
one last thing, the french take essential oils internally all the time, so if it's done properly it's safe.