I’ve heard a couple of reasons:
-the glue dries differently in certain areas of the label, causing possible tension and “warpness” in the dvd surface.
Since the inside of a dvd player gets quite hot (feel one of your dvd’s after playing it for a couple of hours) the heat can cause the glue on your sticky label to do bad things…
-applying the label slightly off center can cause a slight imbalance in your dvd. The imbalance might be enough to cause problems during playback.
I don’t use sticky labels, but I’ve read where people do use them, and have never had a problem. Maybe it comes down to the quality of the labels, the label applicator, and the dvd surface???