Classic "there's no upside". By providing feedback, you only provide leverage for a future lawsuit. Not only that, but if you give feedback some of the time, the mere existence of lack of existence of the feedback becomes a piece of evidence. Since only very rarely will the feedback turn into a future hire for the current company, the risk/reward ration is pretty clear.

Have a policy of 'no feedback' means that it is much harder for an applicant to gather evidence for a lawsuit. Sure can be frustrating sometimes though.

IANAL, etc.