The objective was to protect Mojang's IP on the (probably mistaken) idea that if they release the source code it means they lose control over it.

Added to that, my own speculation is that members of the modding community want to keep the barrier to entry for writing mods relatively high, for some reason or another. Some modders, including the brilliant Eloraam (maker of RedPower), want to maintain their own mods as proprietary and obfuscated.