Sometimes a hosting company just wants to know what you are doing on their servers. I would imagine its part of
quality control. If someone tries to run a server with alot of mods, for example technic lite, and it doesn't work nice, that person will go to
their friends and say "Hey, the Infosoft super awesome hosting company suckz!!11! I tried to run a jar and it works badly on their systems bro!". Then your stupid (possibly blind) friend will go "Thanks broz! I didnt even relized bro! They looked cool", and with that, they just lost 2 customers. Why allow you to have a bad experience on a jar that doesn't work well in their systems if they can just control how you use their service and have quality instead.
By the way, even if you have access to the server directory, they can block you from making any changes to important files, such as the jar.