Because then it could read the phone's system settings, which could have dire security and privacy implications. It would also presumably need the ability to change them, because otherwise how do you restore the backups?

FWIW Apple encrypts all the data with your encryption key. So even if you swapped it out with a consumer solution like Dropbox that wouldn't make it less secure. It would make it more expensive for Apple to maintain that connection & increased customer support since people would complain to Apple when Dropbox had an issue.

Ok... then what about all those backup solutions we've been using on desktops? Should we restrict backups just to OS providers because they're "safe"?