Take off the tinfoil for a moment and think rationally. What happens during a protest? Often, huge masses of people gather in a single public area (a street, a park, a government building, etc). While protesters are generally well-intentioned, wherever there are large gatherings of people, there are criminally-minded folk who seek to exploit this via looting, theft, assault, and other wonderful things that the dregs of humanity like to perform. Additionally, it often gums up public works, traffic, etc. It's important that the police (yes, most police officers are just middle class folks like us that are interested in preserving general peace) be aware of these types of things so that they can provide protection for both the protesters and the citizens of the city.
[0]http://books.google.com/books?id=8_HWOTtdsMUC&pg=RA1-PA126&l...
Also, kind of ridiculous that you need a permit to protest.