I can't speak for everyone, but it is most likely the former. The handful of maths teachers I know absolutely loathe word-processed assignments since the majority of students don't bother using proper mathematical notation when they type things up (let alone use a proper type-setting program like LaTeX), so you end up with a bunch of students handing in stuff like:

∫e^x dx = e^x + c

Unfortunately, this sometimes results in teachers abandoning word processing altogether and making pen and paper mandatory.