When we spoke to a labor attorney about this awhile back, their first reaction was basically that we would be insane to do it, because of the legal liability.
We got comfortable with the idea of feedback because we think that we have a clear, documented process that stands up to scrutiny. However, I think for many employers, recruiting decisions ARE arbitrary and unfair. Honest feedback would merely expose the decisions for what they are - reliant on personal affinity with candidates, vague notions of "culture fit", and gut decisions. There's very little quality training for how to ask good questions, evaluate those responses, and render a hiring decision. If candidates could actually hear the hiring manager and recruiter's thoughts, they'd rightfully be pretty angry.