They have a pretty strict policy with altering with the "state's network" (their words). I have inferred that their objective is to limit everyone to a single connection so that they do not have to support a greater number of connections and bandwidth as they might have to if everyone had a wireless router.
Pretty much exact same wording my school used.
The main reason for the restrictions is because of the potential for rogue DHCP servers. Basically, if someone plugs the ethernet from the school into one of the LAN ports instead of the WAN ports, the router will try to assign an IP to all the computers on the school network. Which just results in chaos.
I don't think it's a bandwidth issue because most schools have a bandwidth limit. I think mine was 10GB/week IIRC. And for whatever reason, they didn't meter you if you used Wifi though. My friend was lucky enough to have a dorm in a really strong WiFi location - He would regularly pull 50mbps down and have no bandwidth restrictions.