I have noticed this reduction and I thought is just made to decrease Omega factor and don't kill the design for ASD.
I found this article by Gosh and he explains the history of it.
"Unfortunately, in this case, the situation is not as simple as that. Section 1617.1 of the 2000 and 2003 IBC included a provision that read: "Where allowable stress design methodologies are used with the special load combinations of Section 1605.4, design strengths are permitted to be determined using an allowable stress increase of 1.7…." This provision is not to be found in the 2006 IBC, since Section 1617.1 is no longer in the code. The corresponding provision is found in ASCE 7-05 Section 12.4.3.3. However, the allowable stress increase factor is now 1.2 because Em has been multiplied by 0.7 (1.2/0.7 = 1.7)."
