It's a good question and simple to answer. 
Wood bounces. Most techniques require the deflection of
the incoming sword and quite often you need to control that
deflection until you move to a position whereby you counter strike.
Also, we have a lot of yeilding defences, e.g. you meet the
incoming stroke with an incrossada (direct cross instead of
deflection) and then yeild the pommel underneath and forward to the
opponants face. If the swords bounce off each other then this
becomes very difficult, very unpredictable and slightly
dangerous.
Wooden swords are excellent for beginner and solo drills as well as
pair drills at slow speed but in order to prepare for more advanced
techniques, there's a point where people need to move to steel. I
still use my waster for solo training though as it means I can
train in the park without complaints. I just use steel for group
training.
In Helsinki they start out from the beginning with steel but they
have plenty of sword suppliers and much fewer weapons laws so that
is practical for them. Steel swords are very expensive here and we
have to make the entry level more accessable so we start people
with wood. If they choose to continue, then they have more time to
find the sword that's right for them.
It can take up to 6 months for a sword to be custom made and sent
from the US. Whenever visiting instructors come from Helsinki we
usually ask them to bring us one or two which saves about $200 in
freight fees.
