You don't have any company lawyers do you?
Most companies in the land of the lawyer don't even send rejection letters, just in case the candidate decides that it contains some grounds to sue you over.
It doesn't even have to be good grounds - they just need a sleazy enough lawyer. The more info you give them the more ammo they have.
Yes it sucks to simply not hear from a company, and it leads to negative recomendations about them to friends /colleagues /potential other recruits. You can still be friendly in the letter but I would be careful about telling someone why they aren't hired.