In a room, I can make sure that there is no other person there, that there is no big monitor with solutions, notes, whatever. I can also not see whether the students has another browser open with one of the cheat-websites where one of his faster colleagues has already uploaded the solution. I'm luckily in a field where we can do open-book exams without too much problems, which makes the "hidden notes" a non-issue, but one wants to be sure that it's actually the student who solves the problem. That is much easier in a class room.

Higher education is already quite expensive. It would be great to have highly qualified professors spend more time directly interacting with students, but who will pay for those extra professors?

I guess this is a consequence of the Covid pandemic, where such a thing is not allowed at the moment.