Let me be clear. I have no issues if people want to mess up their phones. By all means do so. I just want someone to actually tell me why it's a good idea to do so which hasn't happened yet.
It's good to hear that you don't want to impose restrictions on what people do with their phones.
The normal reasons why people do these things with Android and iPhone has to do with getting around blocks put in by either the manufacturer or carrier. With iPhone it's mostly about installing apps that Apple won't approve. With Android it's normally about getting the vanilla version or having a 'neat' looking interface.
I wouldn't personally install a custom ROM (if a phone was too restricted I wouldn't buy it in the first place), but I'll try to answer your question.
I think the reasons are the same as for iOS and Android. Installing non-approved applications, running newer/different versions of software which are not officially supported, getting around carrier restrictions such as SIM-locks, prevention of tethering, etc. And also because some people like to tinker and experiment, which is not a bad thing.
Obviously this is just speculation, those who would actually do this can give a better answer.
Your reasons for what, exactly?
1) Most people choose WP for the interface. It's one of the main selling points. If you want to change it why are you on WP?
2) I don't think there's anything that's really blocked on WP, you're getting vanilla WP, so not sure what will be bypassed if you 'root' it. I guess some carriers can be difficult but then don't choose that carrier.
3) I think some people believe if get into the OS they can then put in features they want. Not sure how easy this would be to accomplish as I don't think it's that straightforward.
4) MS will never allow software for 'rooted' phones in their Store so it will be totally out of control opening doors to viruses and malware. MS has enough issues and a bad rep with their Windows OS, that's why they're very cautious with their phone. They don't want virus software slowing down the phone OS.
1) Maybe. Actually I suspect most people choose WP because the Nokia 520 is cheap, but that's a discussion for another day. Liking the UI doesn't invalidate any of the points above.
2) Restrictions on WP are similar to restrictions on iOS, and are more severe than Android regarding installing non-approved apps.
3) Probably true - although I heard reports that some unofficial version of WP includes a rotation lock. That's a critical feature and might be enough to make some people use a custom ROM by itself.
4) That's a decision for the owner of the phone. I expect someone who has the interest and expertise to use a custom ROM will be aware of these risks, and will probably own a Windows PC already. BTW, I'm not assuming this is something Microsoft would ever approve. The question is whether they can stop it, and to what lengths they go to to do so.
One of the reasons why WP is secure because it uses a sandboxed app environment.
So are iOS and Android (although on Android it's easy for the user to enable installing apps from non-approved sources if they wish).