Because as you slide the conduit down the wire, the edges of the conduit can easily cut into the wire insulation. In addition, the PVC glue for the conduit degrades the wire insulation.I've never heard this, but then I've never had wire in the ground inspected before. I have always dug the trench, unrolled the wire and slid the conduit over the wire before burying all of it method.
What is the reasoning for this not being code?
I do it the same as you, but was just mentioning the code in case he has to have it inspected.
Here it is direct from the NEC:
300.18 Raceway Installations.
(A) Complete Runs. Raceways, other than busways or exposed raceways having hinged or removable covers, shall be installed complete between outlet, junction, or splicing points prior to the installation of conductors.