Also because articles about people are inherently more sensitive than other topics. An article about a town that doesn't actually exist or a garage band that's never played a show is merely an annoyance; an article about a real person that makes false claims about them is a defamation lawsuit in the making. To protect the site from this, Wikipedia has stricter policies for articles about living people than most other topics:
In the US, section 230 protects Wikipedia from defamation lawsuits. A victim of defamation via Wikipedia would have to sue the people who wrote the page, and that's unlikely to be worth the trouble.
Whether Wikipedia is fully protected by Section 230 is unclear. While they do host user-generated content, they also exert a substantial amount of editorial control over it, which could potentially nullify those protections. I suspect we'll never know without an actual court case, and it's in Wikipedia's interest to avoid that happening. And Wikipedia has operations and staff outside the US, including in some countries with significantly stricter defamation laws (like the UK), so relying on Section 230 protections wouldn't be sufficient anyway.
Besides, it's the right thing to do. There's a very real potential for harm by hosting authoritative-looking but false information about real people. Wikipedia can prevent that harm by refusing to host those articles.
That is a very good point. I assume this is why they have the rule then.