It's a safety measure. When it comes to regulating aviation, in general, the FAA is concerned with protecting the public. The "public" doesn't generally have the knowledge to evaluate a pilot, aircraft, or the operation of an aviation venture. So, the FAA puts rules around these things. The private pilot is held to a much lower standard of skill than a commercial or airline pilot. But, that means that the FAA doesn't trust them to fly around the general public.

You can take your friend for a spin in your plane if you want, or go screw around and kill yourself, but you cannot "hold out" your operation as an air taxi or airline to the general public, and you can't make money off of it in any situation.

A commercial pilot has to undergo much more training in operating an aircraft safely. This means the FAA allows them to get paid to be a pilot - they could be hired to fly someone around in that person's plane. But the commercial license does not really train them in running a safe airline, so the FAA does not allow them to use their own plane to run an airline.

EDIT: To word it differently, the opportunity to get paid increases the likelihood that someone will push limits or take unsafe risks. If you aren't under pressure to make your paycheck, you're less likely to take your passengers into marginal weather. (One of the most dangerous occupations in aviation is medivac/aviation EMS. There, the pressure isn't generally monetary but moral: you want to help a sick patient, so you take more risks.)

> If you aren't under pressure to make your paycheck, you're less likely to take your passengers into marginal weather. (One of the most dangerous occupations in aviation is medivac/aviation EMS. There, the pressure isn't generally monetary but moral: you want to help a sick patient, so you take more risks.)

Critical care (but not flight) paramedic (though I have transferred patients hundreds of times to them):

When we request Heli EMS tht providers are given patient details, but the pilot is strictly given "pickup" and "destination" (they used to be given patient weight, and may still be depending on location and size of helo, but generally not) - the goal being "evaluate safety based on weather conditions only, not a patient condition that tugs the heart strings".