Because you only paid for the cheaper "studio" version of Vegas rather than the full version. True, it would be nice if the button didn't show up at all since it's kind of a slap in the face. But i guess the marketers are trying to remind you of what you could have if you paid more.
If this is for DVD, you can achieve some manual control of MPEG2 render settings by rendering to DV AVI from within Vegas Movie Studio, sending the AVI file to DVD Architect Studio, then doing the MPEG2 conversion there.
In DVD Arch Studio: Make DVD > Prepare > Next > Optimize. In this Optimize window, there is a slider control for bit rate, or you can select "Fit to Disc", which will calculate the best bit rate that will allow your project to fit on a DVD. (This is for VMS 6. VMS 7 is probably similar.)
In general, though, the default rate from VMS is pretty good, and saves you the extra render step. Unless you are trying to fit more than an hour or so onto the DVD, the render to MPEG2 from VMS is probably good.