Banning compasses would emphasize the map reading aspect of the sport and would reduce the mechanical use of a tool. It would make the sport a little bit cheaper.
For the most part, maps are good enough that you don't really need to have a compass to find your way around a course.
it really depends on the terrain that you are to orienteer, in the centre of Poland, where I personally live, running without a compass would be a real disaster! greeting from Poland;)