Sleeved suits are illegal in non-wetsuit WTC/Ironman races. They are legal according to USAT rules if you do non-WTC races in the USA. I can't speak for the other national organizations.
As to the "why?" I posed a similar question in this thread:
http://forum.slowtwitch.com/gforum.cgi?post=5785286 . Nobody seemed to know why in that thread but I researched some more stuff on the internet and the WTC rule aligned with the ITU rule which aligned with the FINA rule. So the origin is with FINA's rule. FINA's rule regarding sleeved suits was indeed born out of the controversy surrounding the use of the Speedo LZR Racer suit during competitive swimming events in 2008 (most notably the 2008 Summer Olympics in Beijing). FINA changed the rule that suits could not extend below the knee or past the shoulder. Oddly enough, the Speedo LZR suit did not have sleeves. It was the full length legs that were the main issue as far as the "body fit" of the suit, but FINA's rule change was "full length body suit" specific. There was no competitive swimwear that had sleeves. ITU adopted the FINA rule, and WTC aligned with ITU rules. I think most agree that swimming with sleeves is actually a disadvantage, or neutral at best. So a rule meant to limit the length of the legs of the suit ends up having a ridiculous lasting effect on triathlon without any rational reason for the sleeves part of the equation. It would be nice if WTC and ITU would agree the sleeved part of the rule, which was an after thought and immaterial piece of language in the FINA rule, needs to be tweaked for triathlon. If they believe a sleeved suit offers some competitive advantage in the water, which by all accounts it does not, they should offer up some science, research, and testing saying it does. It's great that it can offer aero advantages on the bike but that's a very distant second reason to wear a sleeved suit for me. First and foremost I want the sun protection. I'd like to be able to do that without having to change suits in T1 or fuss around with rolling it down and wearing a swim skin and all that. Sun protection was not something FINA thought of when making their rule since it was a reaction to a suit being used by competitive swimmers in a pool. WTC and ITU need to revise this dumbass rule for triathlon purposes.
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