Why can't I craft TNT on my server?

You entered an incorrect damage value for that 64 stack of gunpowder you spawned for yourself via the op /give command. Its gunpowder by name only, wont work in any crafting as it isnt natural gunpowder.

Go get them the real way, or next time don't use the fourth parameter of /give <name> <itemid> [quantity] [dmg value]