They likely need to be able to mount your filesystem for some of their features to work. That's how they can reset your root password, write out network configs, etc etc.
Also: You must add an SSH key when creating a Droplets from a custom image. These Droplets have password authentication disabled by default and it’s not possible to use the control panel to generate or reset the root password.
https://www.digitalocean.com/docs/images/custom-images/overv...