In the interest of not falling into the bottomless pit on this subject, I'll venture out to the edge, but I have tied myself off with a safety line first.:wink:
First there are standards in place for everything we do and consume in today's life style. These standards are called ANSI (American National Standards Institute) The tile industry falls under ANSI 108.01 thru 108.17 and ANSI 118.1 thru 118.12. In addition there is ANSI A136.1 and 137.1
These standards cover everything regarding ceramic tile, thinsets, epoxy's, organic adhesives, radiant heat as related to tile, and the list goes on. All the thinsets, epoxy's etc are required to be tested and have to meet a minimum shear bond, tensile etc strengths in order to be classified in one of three standards that thinsets fall into for classification. In today's market all thinset and adhesive manufacturers have approximately 30 or more different types available. They are not trying to remove your money from your wallet unwillingly, as these products are made to do a specific job. ( bond to certain substrates under certain flexing conditions etc.) Some of these products are as high as $50 per 50 pound bag and I can tell you with absolute certainty that if I needed that product because of certain criteria, that price is nothing in the total cost of a failure.
Now to your question of why you can't use mortar to set tiles:
First and foremost is that product does not have the shear bond or the tensile strength to meet the minimum requirements of today's standards.
Second the mortar will not bond in as thin a layer that is required for setting tile. Thinset is designed to have a minimum of 3/32" bond coat between the tile and substrate. I have seen many installations that have use thicker amounts of thinset. The thicker the thinset the more shrinkage occurs thus causing tiles to sink lower to the ones next to it. Also the thicker the thinset layer, the weaker the bond. Tile is a completely different material from brick, block etc. Most of the tiles in use today are made of porcelain. Since this is a extremely dense product with an absorption rate of <.5%. it does require a highly modified thinset and the substrate has to be taken into consideration also. Remember you not only have to bond to the tile, but also to the substrate. Not all thinsets are compatible to every substrate. straight mortar mix will not bond to wood, period.
I will tell you that this is a very technical industry and is becoming more so every day. I serve on the Board of Directors for the National Tile Contractors Association and we meet twice a year to just try and keep up with the new and changing things in the tile industry. As an example the ANSI A137.1 was 17 pages and the new one is in excess of 30 some pages. That's a big bunch of new stuff.
Anyway, I hope this answers your question as it is my belief that's all you really wanted. In their defense, I do understand from where they are coming from and hopefully you understand why you were given the advice. From my perspective, and I believe theirs also, we don't want to see any failures. That's rather hard coming from me when I make my living doing the forensics of why the installation failed.
One other note on failures, typically the cost of a failure is a minimal of three times the original cost. That doesn't take into consideration the additional cost of the lawyers and lets not forget me!!
Good luck in what ever you decide to do.