I'm not sure why you decided to use a hoe and pour water. Trees don't need those conditions and... actually don't grow on farmland! Only plain dirt works.
[Prior to 1.7.2 the above behavior was considered a bug. As of 1.7.2, this behavior has been fixed. The bug database entry for this bug is here. The above behaviour was causing the problem. The discussion below causes (on average) more than one bonemeal to be consumed when growing oaks in this configuration.]
One more problem could be that there's not enough space. Other kinds of trees require a 5x5 space.
I just tried to grow an oak close to a wall. It succeeded, but required about 10 bonemeals, and that's probably not good.
One more thing. I would remove those torches on the walls. As they are "transparent" trees will replace them anyway. Torches near saplings should be enough.