I will give you the biggest example. Must deliver first class letters to every address in the US for a set price.
Isn't that one of the only things they have over UPS/Fedex? (Besides for flat rate package options, which is the same idea)
Eta: I mean to say that if they wouldn't have that restriction in place, it wouldn't be flat rate. In that case, alot of the business would shift over to other providers.