Canal Rd. between the trailhead and the parking lot is too narrow to handle hiker/biker traffic safely. A river crossing makes a resolution difficult. Easier to close the trail than provide accommodations for users on Canal Rd. Closing the trail in order to "discourage" users is lame.
If this is really the reason, that's ridiculous. Every time I'm parked at the canal lot, I see plenty of cyclists riding the road. It's an extremely popular road for roadies.
But the park is worried about a few mountain bikers traveling a quarter mile?