Oil is usually easier for staff to feed than customized hay, alfalfa, or grain - which uses up limited grain room space, or has to be stored remotely. Most barns don’t allow people to bring their own grain/hay for that reason.
The benefit to oil is that it adds negligible time to grain set up, takes up no space, and it’s guaranteed to be eaten if your horse finds it palatable. That cannot be said for other ad-lib forage options; is the barn staff going to wait for Dobbin to eat his 10lb of boarder-provided hay/grain in his stall? Either Dobbin misses out on T/O time to eat his personalized rations provided by the boarder in his stall (and gets agitated being alone in the barn), or worse, Dobbin is fed his personalized rations in T/O, and all the other horses benefit from it and eat his food.
It highlights why customized/personalized feeding options rarely work in a boarding barn. There is just no cost-efficient, labor-efficient way to get additional food into a boarded horse beyond the minimum provided by the barn.