I think most of the time I hear variations on the two following reasons:
- "It might get covered with snow."
- "Some rascal kid may turn it off."
I will add a third: In some areas, the extra expense and hassle will cause people to upgrade service equipment off-permit, or leave obsolete service equipment in place. For example in some neighborhoods in San Francisco there are still bunches of 100A FPE service panels on underground services. 230.85 effectively prohibits replacing the FPE equipment with modern like-for-like under permit (by requiring unaffordable new service laterals that no one will pay for). I'm glad I'm not working in SF anymore. The rascal kid scenario applies in many areas, too. And a sizeable percentage of houses there also simply don't have physical space for an outside service disconnect without changing the architecture, especially when you add PG&E's required clearances from the gas riser. It will be interesting to see if they decide to delete 230.85 from their local code. All their local ammendments are more restrictive than the NEC, not less.