Is it really that hard to get your head around? OK so in "good areas" having it on the street is better as they have less claims of people bashing them into the garage and this is a higher risk than those getting broken into (ie they pay more out for garage prangs than break ins on the street). In the OPs case, he is (quite likely) in a "bad area" according to the underwriters and the only way they will cover it is if it is locked up in a garage. In this case the risk of it being nicked off the street is high so they will only cover it if its locked up. They will weight the premium for it being in a garage, but at least they are willing to cover it.
Insurance companies arent stupid, they weight their premiums based on claims that they have had, they dont just make up silly rules. Now this means for most you get a good deal as the premium is tailored to your circumstances, but if you do fall into a higher risk category it means you will be weighted up accordingly or told you wont be covered.
If you dont like it then go somewhere else. Simples