This error can occur when the Create Geostatistical Layer tool is run using a dataset with coincident points, the Include All option is selected to handle them, and the geostatistical layer has measurement error set to 0.
Different values measured at the same location imply there is some degree of measurement error. Thus the geostatistical model should have a measurement error greater than 0. Revise the input geostatistical model to ensure that this is true. Alternatively, set the method used to deal with coincident points to some option other than Include All.