What is the reason Light Sport Aircraft (LSA) minimum speed is limited?
The FAA mandates a maximum to the stall speed, not a minimum. The minimum speed must not be higher than a given value.
The minimum speed is limited in order to reduce the risk and severity of accidents, especially during landing. The same was used in FAR 23 where a speed limit of 61 knots was mandated for singe-engined aircraft and multi-engined aircraft of 6000 lbs MTOW or less (§23.49 (6)c).
A slower stall speed translates into a slower approach speed and shorter landing distance. Both help to prevent accidents by giving the pilot more time to get the landing right and come to a stop without crashing. Also, the energy involved is smaller so if something goes wrong the accident is more survivable.