Some people can't handle alcohol. Others can usually handle alcohol, but it really only takes one time to be an issue. Get large enough, and serving alcohol at company events guarantees at least one, sometimes more, HR headaches, statistically speaking.

I'm not a huge fan of a company changing its behavior because it wants to avoid risks that are just inherent in dealing with people (the logical conclusion is to pretty much treat all your employees like children to avoid anyone causing trouble) but I can at least respect it if they're up front about their motivations.