On one hand, the students and instructor should have checked which formats are accepted and made sure they used the right ones. On the other hand, the examiners should have told them about the problem instead of just failing everyone. A good upload system blocks unacceptable formats, but these would have been sent in a single archive or mailed on CD. Looking at previous years' entries (under "Getting the standard right") shows that they are major projects with multiple resources, including a web site. That can't reasonably be submitted through a form in a browser.
Locking a file is easy. So is unlocking the file. Locking a file such that anyone can read it, but no one can unlock it, even when copied to other computers possibly running different operating systems, is not at all easy. If you actually read past the first sentence, you'd see that they have *programs* that can read but not modify .ppt and .xls files, even if the file itself is editable. There is no program that can read but not edit .doc files, so they cannot guarantee the integrity of .doc files, thus they can not accept .doc files.
censored has it exactly right. The list looks strange and arbitrary at first, but they're actually limited by what *viewer* apps exist, and those determine what file formats they can use. Hence Acrobat Reader, Excel/Powerpoint/Mediator/Openmind Viewers, rather than the full version. There are no programs that can only read text files, so no .doc, .txt, .rtf, etc.