My conclusion:

It's to put the wheels/sliding surfaces of the bag up so the bags travel on the conveyer more smoothly without shifting and clogging the system up. I caught on quickly to the "upside down" phenomenon when I started traveling with a Victorinox "Swiss Army" rolling carryon/backpack. It's red on the back and black on the front - but when you set it down on the black surface the wheels touch and it's easier to roll around. So it always comes down the chute on its (dirty) red face.

Probably "government regulations" in this case can be translated to "My boss yelled at me and told me this is the way I'm supposed to do it."