Looking at it from a Cornell point-of-view, the most innocuous reason I can think of is that they want a canonical library of papers that others can mirror rath

Looking at it from a Cornell point-of-view, the most innocuous reason I can think of is that they want a canonical library of papers that others can mirror rather than researchers having to search each individual university's arXiv. If they let others fork and set up their own servers it could lead to interesting modifications/applications but it would no longer be in their control and might make the preprint locations fragmented. (and the other servers might not have the same moderating standards) The other more greedy explanation is always money. Of course open source isn't antithetical to profit, but as mentioned before you do lose control and maybe Cornell doesn't want competition. Even if the project was started with the best of intentions, they still need to make it self-sufficient and maybe even profitable so they probably decided it's in their best interest. Of course this is all just me speculating.