I say it's straightforward and makes sense. It's all about liability.
If you go ahead with a fix, they will make sure it's in proper working order before sending it back. How do you put something back into the same broken state it came in as? You can't you can either leave the tool in "service position", or fully fix it. If they try to put it back together they A) might not be able to, broken things are like that. B) might not get it back to the same state it was (runs differently than it did before. C) could be returning something in an un-safe state which then opens them up to all sorts of liability.
I don't see a big deal with this either. If the tool is broke and out of warranty, I'm not likely to send it in in the first place, I would try to repair it myself (heck even under warranty I would prefer self repair), but ignoring what I would do, it's out of warranty and you send it in. At this point the tool is all ready as a cross roads. If the quote for repair it too high, the tool has basically meet it's end right there. So the state it comes back in doesn't matter. The option beyond that is to either attempt self repair, or put it in the boneyard as a parts tool for other tools. Outside of that it's time to begin scrapping it. For me the process is to fully dismantle the item, put what can be recycled in recycling bin, now separated, keep parts that look like they could have future use, and then toss what can't be re-used/recycled.
Coming back like this just makes my disposal task easier. Taking apart tools/appliances/etc to dispose of them can be a pain, this just gets some steps done.
Far as comparison to cars. Mechanics don't tear into the car without confirmation you are going for it. Sure they can plug in scans, pop hood, take wheel off and minor things to check out. But they won't do real tear down work without confirmation of repair. Some random mechanic here or there might, but that's not how it works.