Just trying to think like a corporation would...

Perhaps it's a signaling thing. Historically companies have wanted their workers to be loyal and dedicated to them -- that's part of the reason they do 401k's, career paths, etc.

So perhaps the unwillingness to relocate to on-site tells the company that you aren't as dedicated to their success as someone who is willing to be there.

Remember that most mid level management still seems to be stuck in 1975. They don't understand that worker loyalty went by the wayside because of the recent RIFs that became commonplace in the last 20-30 years.