Well, short answer, someone who doesn't want to lie on a government form.
Longer answer, I think it's more "perception protection" for the FAA. Some habitual drunk or drug abuser who maybe just hasn't been caught yet gets a pilot's license and proceeds to do something sadly predictable. Press interviews friends and neighbors and finds out he's got a huge problem and everyone knew about it. Would YOU want to answer questions about why you gave him a certificate without even so much as asking the question? I sure wouldn't.