Having violated this all the time I've been to Hawai'i I can understand why do they do that - for example, if you continue on the road to Hāna/Maui beyond, down to the southern side of Haleakalā the road becomes really dodgy, later turns into gravel and there is no water/gas for xy miles available, so for casual American tourists it might be pretty scary. Also, driving the north-western part of Maui is on a very narrow road over cliffs and fallen rocks (not as bad as parts of Tenerife though). I actually had an encounter on a pretty tall cliff where I was driving Subaru Forrester and some US female celebrity named Kim was driving the opposite way in even a larger car; we drove past each other with smiles in about 1mph to avoid collision and she must have been right on the edge with her car while I was almost scratching the right side rocks. Even Saddle Road between Maunas on the Big Island could be pretty demanding to casual tourists in fog and really slippery when descending down to Hilo in strong rain, which is like always (saw a crash once). There are also some scary roads on Kaua'i and O'ahu. In US it's so much easier to get a driving license than in EU, so your casual drivers are not used to fast and safe driving like in Germany, many off-road segments like in Spain or navigating chaotic situations as in 3rd world countries, and your society is generally on the safe side (even excessively so).

They probably don't want you taking a road you shouldn't, getting hurt, and then suing them because they didn't warn you about the dangers. Or they get tired of having all their cars smashed up. Insurance covers it, but it's still annoying.

Well, they still have trouble with you if you get stuck or wreck the car, so it is easier for them to just list the "forbidden" roads. Not sure, but your insurance might be void if you crash the car where you were not supposed to drive.