The reason is pretty simple: it's a matter of space and aesthetics. Formulas can be pretty complex. The dialog window gives an input box that allows for multiple lines, to make editing your formula a little easier. There's only space on the main screen for a single-line input. If one were allowed to edit the same formula on both the main screen and the dialog, the line feeds would be lost, and hence formatting a formula would be pointless.
I suppose some room *could* be stolen from the Notes section. I've put a note on the to-do list to look into this.