Best explanation I found was from the following forum post which was discussing why the 4K LG only has USB2 ports on the back. Will quote it here.
http://forums.macrumors.com/threads/apple-teams-up-with-lg-f...With the new displays, its the 4k one that only supports USB 2.0 speeds, the 5k one has "Three USB-C (USB 3.1 Gen 1, 5 Gbps)".
Looks like the two displays are actually using different technologies: the 4k one connects via "plain" USB-C, which means it uses USB-C's "DisplayPort Alternate Mode". USB-C has 4 pairs of high speed data wires plus 1 pair for "legacy" USB-2 signals. In DisplayPort Alternate Mode, some or all of the high-speed pairs are physically dedicated to DisplayPort signals. Unfortunately, Intel's USB-C/TB3 controller only supports DisplayPort 1.2, so to get 4k at a decent refresh rate takes over all 4 of those pairs just to run the display, leaving only the legacy USB-2 channel for other uses.
As for 5k, you can't do that with just 4 DisplayPort 1.2 data pairs - remember the Dell 5k display needs two DisplayPort 1.2 cables. However, Thunderbolt 3 works in a different way: rather than physically allocating wires to DisplayPort alone, the displayport data gets moshed together with the rest of the Thunderbolt signal so the display & peripheral data shares the same physical wires - the DisplayPort connection is a "virtual" one. Plus, Thunderbolt 3 has enough bandwidth to provide two virtual DisplayPort cables (8 virtual "wires") down a single physical cable, so it can can drive a 5k display and still fit some high-speed USB data around the edges.
That said - it probably doesn't make sense to hang your USB3.0 RAID array off the same pipe as a bandwidth-hogging 5k display. If you're gonna go 5k and want seriously fast external storage you can probably forget the whole single-cable docking thing until Thunderbolt 4 rolls around (...by which time you'll probably want a 25k display wall...)
USB-C DisplayPort mode can support 5k by using DisplayPort 1.3's higher data rate (although, again, that only leaves the legacy USB 2) but not when the computer's usb-c controller and GPU only support DisplayPort 1.2 - and that currently includes anything with an Intel USB-C controller (which is part of their Thunderbolt 3 controller). Complaints on a post card to Intel.