It's because the body scanners do not detect explosives or weapons - they just detect "stuff." Therefore, you can't have anything in your pockets because the machine would show that something was there other than your skin and your clothes.

It is indeed their normal procedure that you remove your wallet and anything else. This is one of the complaints about the scanners and their use. You have a chance of having your wallet lost or stolen. You are supposed to have the right to keep your belongings in sight, but with the scan and the pat down you're likely to get after the scan...