Subversion diff whitespace problem

I wonder why subversion ignores whitespace when it could use it to sometimes
make more sophisticated diff reports.
Attached is an image with an illustration of the issue.

In NetBeans while editing Java, when I insert new code between the opening
and closing brace of the class, it identifies the first closing brace of any
new function as what used to be the closing brace of the class, even though
it is indented differently, and the diff doesn't appear as it logically
should -- such that all new code is new between the existing braces.

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