About that...

However, a lot of time, manpower and money goes into buying, maintaining and training to use parachutes. With the Air Force hungry for cost-saving efficiency under its Air Force for Smart Operations in the 21st Century Program, commonly known as AFSO 21, the parachutes were deemed obsolete.

On a KC-135, the only people who might be able to get out quickly are the people in the cockpit, and their only exit door is basically right in front of the wing.

So just equipment used too long without proper maintenance or literally one little thing out of place causing an accident?

Given this description:

Two aircraft were involved in the incident. One of the aircraft went down in western Iraq, and the second landed safely.

It seems likely that there was a collision. Refueling is a tricky business, and while it may be possible to design better systems the physics of it are always going to be an issue.

Iraqi resistance claim they launched a SAM at the thing.

Could also have been some kind of fuckup during a refueling