No clue why. The cynic in me tends to believe that with so many young veterans who are going to have PTSD, the VA is just looking for an excuse to avoid having to pay for all those dogs.
But I don't know if that's really it.
I have a thought regarding what may be (partially) to blame for this, so bear with me for a second.
At my local base, my Civil Air Patrol squadron shares a building with the Purple Heart Society, which offers a wide variety for wounded soldiers. Among the fliers and posters they have out is one that offers "any veteran with PTSD or depression" a chance to either get a Service Dog or train their own dog to become a Service Dog.
I am all for making Service Dogs more accessible to people who need them, BUT one of the requirements for someone to have a Service Dog that seems to fall by the wayside with some of these programs I have seen locally is that the disability must be a legal and not just a medical disability, meaning that it severely impacts at least one major life activity. Many of these Soldiers who get interested in this program don't meet that definition of disability as their symptoms are controlled by medication and the dog is a pet or, at best, an Emotional Support Animal.
There are also a number of organizations that pair Soldiers with PET dogs because dogs provide "emotional support". I see a lot of blurring of the lines between legitimate, task-trained Service Dogs used by people who actually need them as adaptive medical equipment, and pet dogs / ESAs being given to Soldiers because they have signs/symptoms of PTSD, depression, etc.
I think the move from the VA is misguided as it does not recognize legitimate PSDs working for a person with a non-physical disability, but I can see where they are coming from based on what I said above, that a lot of people seem to be getting dogs without having an actual need for them in the sense of a true Service Dog.