The idea is that different equipment is better suited for different individuals. By mandating a specific kind of equipment for all athletes, you'd be benefiting some individuals over others.

For example, road bikes have different frame shapes that are suitable depending on your torso length compared to leg length.

Of course, the natural next step would be allow some flexibility (different frame size but same material), but you can see how that could be a slippery slope of legislation and lobbying that would end up in a similar situation to where we are today?