Actually, it is mostly because the players we support do not support any of the lossles codecs. The main players we support are: Flash, Silverlight, iOS, Android and Blackberry. The common audio codecs to reach these players are AAC and MP3.
Well, I can't really speak for Charlie, but I think the reason is that lossless uses too much bandwidth. A 44khz 16bit stereo .wav file would be 44,000 * 16 * 2 = 1,408,000bps. Most use cases call for compression.