Well, it is kind of stupid and baffling. But that's the way things work.
Here at Cascade Writers this weekend, I hit on an analogy which seemed to help explain why.
When you go for a job interview, you fix your hair and put on a nice pair of shoes. Outside of consumer facing retail or front desk work, not all that many jobs actually require good hair and nice pair of shoes in order to perform your job functions. For example, most programmers I know work in cargo shorts and sandals and t-shirts, and you're lucky they're wearing clothes. Yet even most of them fixed their hair and put on a nice pair of shoes when they interviewed. Likewise, I don't really care what my plumber is wearing so long as I don't have to think about their anatomy while they're working.
The reason you dress like this for a job interview is fairly clear. You want the interviewer to focus on your qualifications for the job. You don't want them wondering if you slept in the bed of a pickup truck last night. The purpose of fixing your hair and wearing nice shoes to make your personal presentation transparent within the context of the social standards of job interviewing process. You are removing distractions.
So it is with standard manuscript format. The manuscript is not the story. At best, it's a tool for transmitting a version of the story from the writer to the reader. In this case, the editorial reader. If you follow standard manuscript format, your manuscript is functionally invisible, and all the reader sees is the story. You don't want them wondering why the heck you used Zapf Chancery for the font, or glancing at the sweet kittens at the top of your lavender letterhead. The purpose of standard manuscript format is to make your story's presentation transparent within the context of the professional standards of the editorial process. You are removing distractions.
And yes, if you're a brilliant enough writer, you can submit something written in crayon on butcher paper and get it published. Just like if you're a brilliant enough whatever, you can get a job in your field even if you show up to the interview hung over and decked out in bad skag. But why create the distraction?
Standard manuscript format brings the focus in sharply on the story. Exactly where you want it.