1) By preventing secondary sales, the company can control the going price for the stock. This means when the company has an independent third party do a 409a valuation, they don't have to take into account high third party sales, which would push the 409a up. Not inflating the 409a is beneficial to employees that want to leave the company and exercise stock. It means their AMT tax hits won't be as bad.

2) It also means the company/board get to control who are investors in the company, and thus who has the ability to request to relevant internal company information (like financials).

Company is not supposed to control its share price. Company is supposed to be subjected to its shareholders.

You can sometimes perform some clever financial engineering with a forward contract and a motivated investor to get around this though.

It's not dirty: it keeps incentives aligned because the shareholders have common goals, and the terms are stated clearly upfront.

But what we have here is not only that but also a prohibition on sale to an outsider. So not only "we can intercept the sale at the same price you offered to someone else" but also "we can block that sale even if we don't want to participate in it".

“The attached document is part of the Startup Forms Library made available by Clerky as part of an initiative with Orrick and Y Combinator to streamline startup legal documents. By using or viewing the attached document, you agree to the Terms of Use for the Startup Forms Library, which can be viewed at https://www.clerky.com/site/form-terms.”

Transferability:

“You may not transfer this Option except as set forth in Section 6 of the Stock Option Agreement (subject to compliance with Applicable Laws). You must obtain Company approval prior to any transfer of the Shares received upon exercise of this Option.”