While I can’t recall where exactly I read it, I remember seeing something that said he didn’t want one since it just wasn’t his sort of thing. A number of characters adopted last names based of their home villages but he’d rather be called Simon the Digger instead of something like Simon Giha. It was something along those lines.
Here’s how it was explained in the 3rd novel (paraphrased from memory): Rossiu wanted to have every citizen have a last name based on their villages to make it easier to count the population, and kept bugging Simon to do it too so he would set an example to the populace. But Simon kept saying he didn’t need one, and Rossiu eventually realized that he wanted to be known as simply “Simon the Digger,” nothing more and nothing less. And since Rossiu was right there in Gurren when Simon first declared himself as that, he understood how important that moment was for him, so after that he just let him be.
I’ve been reading Volume 8 of the Gurren Lagann manga, and I’m thinking of scanning & translating a scene from it sometime. Volume 7 was shit overall and made me start to lose faith in the manga, but Morikota totally went all out on the Arc Gurren battle, and that scene was hilariously awesome. :D