Well, most journals asking for recommendations which scientists are perhaps available to judge the work. The specialization is so strong that editors often have big problems to find well-experienced and willing people who want spend their valuable time for reviewing a paper. However, the journals won't consider somebody who already published with the author. In so far, this question is fair enough.
The last time I sent a paper to a Scopus indexed journal, I was asked to provide 2 possible reviewers. The editor made it clear that they are not obliged to get those persons I suggested to review my paper. I think journals want authors to feel that we have a say on who reviews our paper.
I am quite convinced that the editors only want save time and energy in order to find somebody who can experienced enough to evaluate the often very special and totally new results/ideas/approaches... Although we are from that field it is often not easy to define a name. And...the proposed person has the right to reject the review for any reason. In this case I was already asked whether I know somebody else who they could contact. It is certainly a question of the topic of the paper submitted. For specific problems it becomes more and more complicated. And...you have to consider that the number of publications increased dramatically over the last few years. And my personal impression is that since in many countries and institutes only the number of publications is obviously more important than the theit quality the latter has been changed as well (in average).
You are definitely right, George. However, it can help the team in case there is one for a first orientation. But if there are numerous people working in this field such recommendations are not necessary. There is still another "option" why editors sometimes asking for. At least this is my impression. Several groups compete in the same field and it might be not a good idea to send competing groups non-published papers. This can be even more unethical...at least it keeps a bitter taste if papers are repeatedly rejected.