This is my guess as to why.
When it was present in Pub 2000, the html coding engine would create an
image of the text combined with the image. This meant that the text when
converted to an image was a bit fuzzy and less crisp, and could not be
indexed by the web crawlers, which is of course not desirable if you want
your page indexed by the search engines. As a result a web page layout was
limited to the extent that you could not overlap any design elements.
The later versions of Publisher have used different coding engines that
allow layering of design elements on the page without combining them into a
common image. This opened the door to new design and layout possibilities
because you could layer an image over text, or layer an image over another
image, or text over an image, etc. etc. and they would remain individual
design elements when you published the page. Just to use one specific
example, many of the templates in Pub 2003 and 2007 have bars that are used
as "dividers" that are layered over text boxes. These bars are actually
images, and if you did this in Pub 2000 the bars and the entire text box
would be converted to an image. Bottom line is that by changing the way the
html coding engine worked to allow for layering, and doing away with text
wrapping around an image, opened up more design options than it took away.
If you can't settle on an alternative layout to wrapping text around an
image for your page layout, then you can get the same effect...or similar
effect. As I suggested before you can break your text up into multiple text
boxes around the image that are linked together to allow the text to flow to
the other text boxes. Alternatively you could try this. Drag your image box
to where you want it overlapping the text box. Then go into your text box
and where the text needs to start wrapping, insert a soft return. By that I
mean hold down your shift key and then hit the return button. This will
create a new line instead of a new paragraph. Go to View > Special
Characters to view the difference in the paragraph symbol and the arrow of a
soft return. Then drop to the next line of text that is overlapped and
insert the soft return and work your way down each line of text until all
the text is visible...is "wrapped" around the image. Not exactly the same
thing, but it will at least simulate the text wrapped image.
One other workaround would be to open a print publication in Publisher, copy
and paste your text box and image from your web publication and wrap your
text. Then copy both and paste special, back onto the page as an image. Copy
and paste this image into your web publication...but then I already
discussed that the text will not be indexed and be a bit fuzzy. However if
you have only a bit of text and don't mind it being converted to an image,
this would work...say a logo and some text?
DavidF