I think that legendaries are banned for a combination of reasons.
1. They are, with a select few others, the strongest Pokemon in the game. This would make the challenges "too easy", so they ban Pokemon. By banning the "best" Pokemon, you are attempting to make it harder. However, if you did it by base stat total, how would you decide the cut-off? If you picked a cut-off, then someone could say "Well, Pokemon X is the best of the Pokemon allowed, so he should be banned too." And on and on until there are no more Pokemon left. By banning only legendaries, you are getting a majority of the ridiculously powerful Pokemon, and there is a nice cut-off point.
2. Most legendaries are obtained late game. If you don't hack to get them, you will be doing a majority of the game without the Pokemon you're using (in the case of a solo challenge).
3. It's a pain to look up the Pokemon by base stat total so you can see who is banned and who is not banned.
4. Banning "good" Pokemon is entirely judgmental. I would much rather prefer a Nidoking or Starmie over Tyrannitar in 3rd or 4th gen, and I would prefer a T/F/I Punch and Psychic Alakazam in 2nd Gen.
I had started a challenge idea a while back. It's called the Evil Challenge. Basically you play through with Rocket, Magma, Aqua, or Galactic Pokemon. I've got everything made, but don't have lists of Magma, Aqua, or Galactic Pokemon. Do you guys think this is a good idea, and if so, can someone help me find the lists?
Lastly, I have a challenge for someone. See my challenge card thing in my sig? I don't like it anymore. Can someone make me a new one? I only want my name, Monotypes, Nuzlockes, and Solos (at least for now). I know this isn't really the right place, but pleeeeeeease?