Consider the life of a Freescale FAE.
On my PC tonight I have CW for HC08 V3.1.1, V5.0, V5.1 CW for S12, S12X, ColdFire 6.1, 6.3 BETA, 6.3 Release, DSCs 6.0, 7.1, 7.3 ..... about 12 copies in all. We need to have multiple version so that we can help all you guys with whatever CW version you have.
If CW automatically installed 5.1 over 5.0, all you guys with 5.0 would get no technical support on your legacy products...
Now, installing 5.1 over 5.0 ... that's a great idea....