Great question! As @sime already mentioned, your hardware wallet needs to be aware of what kind of coin it's signing a transaction. Otherwise your host device could easily make it sign a bitcoin transaction instead of a litecoin one.

Differences between the coins not only include the derivation path, but also fundamentally how transactions work. For the hardware to support different coin transactions, the firmware needs additional code to support it.

The bitcoin-only version comes with a much slimmer firmware, because it removes these coin integrations (and other things, such as U2F). The goal of the bitcoin-only is to offer an as small as possible attack surface by removing all unnecessary code. Security wise the benefit might not be immense, but as a general rule, less code leaves less room for mistakes.

It's also really popular for people who want to gift it to their friends and family, because it doesn't lead to people asking about different cryptocurrencies and instead lets them focus on just Bitcoin.