IIRC because they didn't want to store your username/passwords on the cloud on their servers. The password you gave them was only used on the device, and to have push notification they had to have a server pinging Google every few second and if there was a new mail, send a notification to the device. Needless to say, it's a costly business when you have a few million users.

They wanted Apple to allow then to run a daemon process that checks for new mail on the device, which Apple was reluctant to do (in general, I really like Apple's implementation of background services, but in this case I think they should've relented).