Must make it awfully difficult for a person to prepare for a test if they have no idea what they will be asked to perform especially with such a wide range of possibilities. I can see that maybe for an upper kyu rank but it seems like it would be a lot to expect for someone's first or second test.
Well, Sensei is not rigid about it -- it's not like he'd fail someone testing for 5th kyu who couldn't do something that was officially a 4th kyu technique. I think his real reason for doing it is that it pushes people in the direction that he really wants us to go: less towards memorizing a list of techniques, and more towards learning the core principles. So, instead of learning "shomenuchi iriminage omote and ura" and the like, he's trying to get us to pay less attention to the technique and more attention to the opening, from which (if it's good) the technique can follow. Anyway, yeah, there's always a bit of a freakout period before tests when people realize how much they don't know, but I'll bet that's the same at any dojo. The seniors always put in a lot of extra time helping people get ready for tests, and by test day things are pretty calm and people feel ready.