Most countries require their own dual-nationality citizens to enter on their local passports not foreign ones, Britain was an exception before. It's not unreasonable to ask for the British passport, and I say this as someone affected.
Why? What legitimate purpose does this serve?
France had a weird issue recently about the media talking for ages about someone who committed a crime while the state had asked for him to be deported months before on the basis of his foreign passport and it took weeks for someone to finally notice that the guy was actually French. It made the police looks clownish.
I've seen claims this technique was actually recommended by the British consulate, no idea if that's true.
Oh that's an interesting little loophole that might be a[nother] reason. A handful of EU member states disallow dual citizenship, so those taking advantage of "EU and British" might be impacted by this.