Reason behind the Tour Down Under "People's Choice Classic"
It's complicated, and this may not be all there is to it.

From my reading of part 2 of the UCI WorldTour regulations (p43-44) is


The duration of new "Continental" events is 5 days, unless the event has an exemption from the committee. Existing events have the same duration they had in 2004. The Tour Down Under went for 6 days in 2004. 
A prologue can be included if


It does not exceed 8km.  
It is time trial.
It counts as a race day.



This all confirms your suspicion that it's due to the rules. The Peoples Classic was 50km, and was not a time trial, so it couldn't be part of the TDU. As you say, it was good for attendance and marketing (and publicity).