User blog comment:Tiredman2/Mass Effect Plot Holes and Contradictions/@comment-5337704-20120822123143

Outside of the game logic.

To the writing bit, personnally I believe it was just something thrown in, Kasumi needed a loyalty system and they through it where you pick her up at. Same as Normandy DLC being so close to Omega.

Inside of the Game Logic,

Council races tend to stay grouped near each other. Illium probably being the only planet outside their area of Asari Governmental Influence but that also includes places like Novaria, farther away from the government influence of the Citidel. Humans and the Batarians were the main races that colonized what ever they found regardless of what anyone else warned them about.

The other guess is that the council races didnt want any race so close to the citidel which could unbalance the power of one council member over the others, but that guess is a human (not working with other races well) guess. :-)