The reason is that the Church of Jesus Christ of Latter-day Saints, commonly known as the Mormons, engage in a practice of baptizing the dead. Any Mormon in good standing may stand in as a proxy for a dead relative, engaging in baptism on his or her behalf. Mormons believe that such posthumous baptisms allow those who did not have the opportunity to be exposed to the Mormon gospel while alive to accept or reject that gospel.
While Mormons base their belief in part on Saint Paul's remark about the baptism for the dead in 1 Corinthians 15:29, the Christian Church has, from apostolic times, rejected the idea of the baptism for the dead and pointed out that Saint Paul was actually making an argument about the resurrection of the dead. The statement by the Congregation for the Clergy is based on the need to combat this doctrine which Mormons present as Christian and states that each bishop should
ensure that such a detrimental practice is not permitted in his territory, due to the confidentiality of the faithful and so as not to cooperate with the erroneous practices of the Church of Jesus Christ of Latter-day Saints.
Kimberly, who is herself a Catholic, notes that the Mormons have preserved many parish registers that might otherwise have been lost, and she expresses some confusion over this decision, given that the Congregation for the Doctrine of the Faith declared in 2001 that Mormon baptisms are not valid (because, while Mormons use the Trinitarian formula for baptism, they do not believe in the Trinity).
But that is precisely the point: The Catholic Church does not believe that Mormon baptisms for the dead have any effect, but She does have an obligation to combat errors that are presented as Christian. Baptism for the dead is one such error, and the Congregation of the Clergy, in order to safeguard the true meaning of the Sacrament of Baptism, has decided that the Church must avoid the appearance of cooperating in that error.