pro-NOUN-ciation is universally wrong. Even the highly permissive Merriam-Webster dictionary marks it with an obelus (÷). Here is what they say about pronunciations marked with an obelus:
The obelus, or division sign, is placed before a pronunciation variant that occurs in educated speech but that is considered by some to be questionable or unacceptable. This symbol is used sparingly and primarily for variants that have been objected to over a period of time in print by commentators on usage, in schools by teachers, or in correspondence that has come to the Merriam-Webster editorial department. In most cases the objection is based on orthographic or etymological arguments. (source)
As for why the word pronounce has an O between the two N’s and pronunciation does not, it is unclear, but both words derive from French, pronunciation from pronunciation and pronounce from pronuncier. There is probably some variation in the way the different word stress affected how the words were spelled after being borrowed into English.
I'll elaborate a bit on Barrie's point, which is correct, if disappointing.
The problem is that English spelling was not designed for Modern English. It was designed for Middle English, a very different language. When Middle English changed its pronunciation to become Modern English, English spelling did not change. Furthermore, English borrowed many thousands of words from other languages, which were of course pronounced differently, and spelled differently still.
The result is that one has to choose between two strategies in learning English words, however they are spelled -- this is not a problem confined to the letter I -- or else figure out some way to mix them.
Either you can actually learn the historical rules about pronunciation and learn to distinguish the different kinds of word each rule applies to -- which amounts to learning some basic linguistics,
Or you can do as Barrie suggested, and memorize 2 things about every word you learn -- (1) how it's spelled and (2) how it's pronounced (Kenyon and Knott is your friend here) -- and just ignore the possible but treacherous correspondences you might suspect between Middle English or foreign spellings and Modern English pronunciations.
The second option amounts to giving up all hope of making sense of English spelling. Most native English speakers do this, which is simpler for them, since they already know the pronunciation.
Since Anglophone education systems don't teach anything about English language, they never learn any different, and many still believe there should be a simple rule for pronouncing every letter.
Best Answer
The direct answer to your immediate question is because it never had one — and so of course it couldn’t possibly lose something it never had.
The problem is that you’ve asked a bit of a backwards question; the frontwards question is:
The answer lies in how we acquired them from Old French, where the verbs already had Latin’s u changed to o and which we later diphthonged, but where the differently stressed nouns did not.
More recent exports — well, or envoys — from Rome that didn’t pass through France suffered no such frobnication; just ask your nearest papal nuncio.
Here are the OED’s etymology entries for these:
Understand that this is the same thing that happened to Latin uncia meaning one-twelfth part of something, which coming to us by way of Old French eventually gave us an ounce, twelve of which make a troy pound.
However, the more direct borrowing from the Latin uncia into Old English itself was ynch, a different vowel that ultimately became inch, twelve of which make a foot.
There is also the ounce that means lynx, but that word traces a slightly different route between Latin and English, having confused the leading l- for an article and therefore losing it, much as a napron became an apron over a confusion about articles, just as occurred with an orange which originally had a leading n- in the noun.