I have half the answer. The FSA debit card wiki page has some hints:
All such cards to date bear the Visa, MasterCard, or Discover brand and operate through their main networks; thus all FSA debit card transactions are of the offline variety (also known as "signature debit" or, inaccurately but commonly, "credit"). This can create confusion at merchants such as Wal-Mart that attempt to "steer" debit cards to online debit (aka "PIN debit" or just plain "debit"); FSA debit cards will not work that way.
and lower down:
Unlike other debit cards, the IRS does not allow FSA debit cards to be used at every merchant that accepts Visa or MasterCard. Rather, only the following types of merchants may accept an FSA debit card, usually enforced using "merchant category codes" or "merchant type codes" assigned by Visa and MasterCard:
I believe that it's only when going through the VISA/MC/DISC systems (using "signature debit" aka "CREDIT") that the proper merchant name and type codes (or "Merchants with an inventory information approval system (IIAS)") get passed along for approval.
When using DEBIT, the charge may go through other banking systems (CIRRUS/PLUS/ETC) and thus the codes and proper approval mechanisms don't get engaged.
However, this is only half the answer as there's no suggestion as to why the cards aren't just simply provided as CREDIT cards from the beginning.