Why isn't Telnet enabled by default in Windows 7?

"TELNET communicates with the peer (telnet server) in clear text.
This is a security hazard compared to say the SSH connect.
To this end, the telnet client on windows is disabled by default.
This often comes as a surprise and many sites describe the steps to get it working,
you seem to have found them already :)

For normal purposes, it would be a better option to use SSH (PuTTY or freeSSHd if you want to connect to a Windows machine)."