I have passed this back to the development team, but to the best of my knowledge this was done to support the broadest possible range of deployment options/technologies without relying on third-party tools and systems.
This is to address an introduced issue with Flash-based content. For security reasons, Microsoft and Adobe removed support for UNC paths with locally served Flash content. Prior to this change, our preferred option was indeed to specify UNC.
The flash-based content cannot self-set focus - the interface has an omission (click here to continue) for example - again, this is a security 'feature' introduced by Adobe and Microsoft. Once focus has been set during a session it tends to be persistent. Again, I have passed this on to the development teams.
I know this doesn't address the issues for you, but it may go some way to understanding the why...