I understand there is a prohibition against eating poultry and dairy because people could confuse poultry for meat. This makes sense. But I had a Kosher meal yesterday with tofu. The tofu could have definitely be confused as meat. Why isn't there a prohibition against eating tofu with dairy?

Answer:

Fair question.

The difference is the nature of the "confusion". This law wasn’t instituted because our sages were concerned about people confusing taste (chicken does not taste like meat¹); the concern was confusing the food-type.

Tofu can be made to taste like some meat products. However, tofu is essentially a completely different food-type than meat (legume vs. animal). So much so that tofu's claim to fame is that it is not meat; it is a vegetarian alternative to meat.

In people's mind the difference conceptually between tofu and meat is as clear as night and day, and the permissibility of one is no indication on the other.

Chicken, on the other hand, is similar in concept, Halacha, and life-form to meat. It is very much the same food-type. It is the flesh of a land creature that requires the same methods of slaughtering, inspection, and removal of blood that beef requires. It is sold together in butcher shops and at the deli section of your local supermarket.

Very few (if any) people make a "concrete" distinction between chicken/poultry and meat, and being allowed to eat one with dairy can easily lead to misunderstandings about the other. Which is why it was prohibited.

See also Are chicken and fish considered meat and not allowed with dairy?