Maybe just urban legend, 'cause I can't say I've ever known anyone first-hand that this has happened to, but here's the scenario I've heard about:
With a VIN, tag number and a few photos in hand, Larry Lowlife takes out an insurance policy on a '68 Corvette that he hasn't actually bothered to purchase. Soon thereafter he reports the car stolen, collects the insurance $$ and slithers away.
Meanwhile, you, the owner of said 'vette, have no idea about any of this. Months later, you're pulled over for a defective tag light. Officer Friendly calls in the information on the radio, and gets back a stolen car "hit." Eventually, especially if you've owned the car for several years, you won't have any trouble showing that you're the legitimate owner. But things could be "interesting" in the meantime.
Worst case scenario, you bought the car at auction, maybe from someone you've never met, several states away. Perhaps even the same eBay sale where Larry got his pics and VIN. You've got no proof that the car was yours prior to it being reported stolen. Sure, you'll eventually be able to prove you're a legitimate owner in lawful possession of the car, but how are you going to do it from the County Jail or the back of a patrol car? Even if you happen to have the bill of sale and auction paperwork with you, your documentation is just going to show that the car came into your possession right around the time the police report was filed. That's less than helpful.
Of course, Larry could get his pics and all the information he needs off the car at a car show, or just seeing it parked out on the street somewhere. But the odds of him coming across your car in person are less, and its more work for him, than if the information is posted right on the internet for all to see. Probably the odds are pretty low anyhow, but I can understand not wanting to make things easy for the Larrys out there.