The best answer is because they can....
Let me provide a little history. (Set the WAYBAC machine to 1996)
DVD standards are being set. Hollywood refused to play (to release content), because of th great fear of piracy. No machines will be released because of no content to play it them.
Hardware manufacturers ask Hollywood - "what would make you happy, so that you would release content?"
Hollywood response with - "super-tough encryption, that can't be broken (snicker), and region codes so we can release the content in waves. (Say, region 2 first, then region 1, the region 3, ect., each separated by 3 months, so the revenue can be spread out over time.)
Manufacturer - "You want it, you got it! We'll use CSS encryption, which we are told cannot be broken (1996, remember), and we will put region codes on the discs, and regions codes on the machines so they won't play on any machine without the right region code. Here's the contract, look it over."
Hollywood didn't understand anything about maunfacturing, looked over the contract, and stepped on the dotted line.
Hollywood
assumed that all the manufacturers would make separate models for each region....<sucker...>
The manufacturers made only one model with an automated control override to set a region on a machine at the final step. That way they could reset stock dependent upon sales in any particular region. It also left open a back door for region code overrides...
The manufacturers were following the letter of the contract, each machine met the contractual requirement of region code limitation for the region it was being sent to.
Meanwhile, back in the US, Hollywood was brib....err, lobbying Congress to pass the DCMA, which made bypassing
both the encryption and region codes a Felony. (see one of my revious posts for the exact DMCA wording.) It passed, and Hollywood thought they were all set. Can't record, can't decrypt, can't bypass the region code, and who was going to ship a PAL machine to a NSTC world? (And that may have been forbidden in the major maunfacturer contracts. I know that in 1999, I wanted a standard sized (26") 16X9 television to watch DVD's on. They were deliberately not sold in the US, to force the US consumers to by HDTV big screen 40" and larger, at $3,000 USD and up, just to get the 16x9 form. I ordered at a SONY 26" 16X9, top of the line, at $2,000 (with shipping to the US from the UK, the shipping costing as much as the TV) and being informed my order was being declined as SONY allowed the 16X9s to be shipped everywherre in the world
except the US! I didn't bother to try to get a PAL DVD player shipped....)
After a few million DVD player had been sold, word started leaking out that, one - some players had separate chips that controlled region codes, which could be replaced with chips bypassing the region code limits, and two - many has software control codes that allow the same bypassing. Hollywood hadn't placed strict contractual limitations on the disc sales, figuring that the hardware limits would stop regional leakage...Which left the current system, which is easy to bypass.
When it came to allowing streaming, Hollywood learned from the earlier DVD control failure, and put strict geo-checking in the streaming provider's contract language. They couldn't sell to anyone outside their defined region. Of course, just like there was a way around DVD region codes, there is a way around the streaming geo-restrictions limitations. One merely "spoofs" the internet address, and off one goes.
In the end, one is not any more legal (at least from a US perspective) than the other. It's just that one is easier to beat. If one is paying for the content, neither way is "piracy", mererly obtaining access to what has been legally purchased....