It's a very good law/rule. Think about it a kid wants to go to his local D1 school who isn't very good and doesn't make much money, lets say UCF for example. But the kid is a sick talent, something like Noel Devine for example. If this law isn't in place...schools like USC or Ohio State or LSU can be like hey here we will give 100 grand and a house and a 150k sports car if you come play for us..........now is that fair to UCF at all?
Another example is if the kid is thinking about commiting to a team for the NFL, or a choosing a agent.........if the agent or team spoil the kid, odds are the kid is going to go with the agent or team.
They can't recieve anything because it isn't fair to toher colleges, teams, agents, ect., what ever the situation may be. The rule can be real favorable to athletes and helps them make the right choices.