There are technical reasons. For example, the limitations in XP made it impossible for them to continue supporting it:
"In a blog post today, Brian Hall announced that the software will not support Windows XP: "Change isn't always easy, and I know there have been some growing pains as we've moved from Windows Movie Maker to Windows Live Movie Maker. I want to address one thing we think you might be concerned about -- OS support...In order to take advantage of the latest and greatest technologies available on the Windows platform, we optimized the new Windows Live Movie Maker for Windows Vista and Windows 7. As a result you get support for newer file formats like HD, a new graphics driver model which brings more reliable and stable support for high-end graphics, and a new engine on top of DirectX, which improves speed and enables even more advanced capabilities over time. If you're still using Windows XP, Windows Movie Maker 2.1 for Windows XP is still a great option."
http://www.betanews.com/article/New-Windows-Live-Movie-Maker-debuts-says-goodbye-to-XP-for-good/1250716270
XP is old and on its way out. Newer technologies not present in XP really limit newer programs from running on the platform, and has Windows 7 support increases, expect this trend to continue.
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