Q:

Why does freestyle swimming restrict underwater swimming?

According to Wikipedia and to CONI:

Some part of the swimmer must break the surface of the water
  throughout the race, except it shall be permissible for the swimmer to
  be completely submerged during the turn and for a distance of not more
  than 15 meters after the start and each turn. By that point the head
  must have broken the surface

I fail to see the point of this rule, it seems completely arbitrary to me.
While arbitrary rules are usual in heavily regulated sports, this strikes me as quite odd in a "freestyle" environment...
Why does freestyle swimming restrict underwater swimming?

A:

Ultimately this goes back to David Berkoff, a US Olympic backstroker in the '88 and '92 games. He realized that by dolphin kicking underwater he could go faster than swimming on top of the water (no surface tension to slow you down).  Using this technique, he was able to set several world records and an NCAA championship.
The problem was, this underwater dolphin kick is also quite suitable for freestyle or butterfly, and if most of the race is underwater dolphin kicks there wouldn't be much difference between the strokes. (Breaststroke requirements preclude dolphin kicking). Therefore FINA decided to limit the distance that a back/fly/free swimmer could remain underwater dolphin kicking.  Why 15 meters was chosen isn't completely clear, other than being a manageable fraction of a 50 meter long course pool, and not to far off what many people were doing already coming off a wall with a few kicks. At least one note I have found states the original limit was 10 meters (Source: Berkoff's bio at the International Swimming Hall of Fame site).

A:

When you allow someone to complete their entire swim as a glide you do a few things that are not considered good for the sport

You emphasize swimsuit technology over strength and speed
Emphasizes lung capacity over strength and speed
Don't use half the body

Swimming is a total body sport about strength and speed. If you allow someone to go the whole way under water you change the competition into something that it's not intended to be. 

