I want to understand this new reasoning: A US citizen can enter Canada by car showing proof of citizenship and valid ID ie birth certificate and valid drivers license. But why does that same US citizen need to reenter the US with a passport? It did not use to be this way. Why has this become a requirement?
Canada decides what's required to enter Canada; the US decides what's required to enter the US. Their governments make these decisions independently and don't necessarily have to agree.
The US's passport requirement for citizens was created as part of the Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA), Public Law 108-458. See Section 7209 (b) (1):
Development of plan.--The Secretary of Homeland Security, in consultation with the Secretary of State, shall develop and implement a plan as expeditiously as possible to require a passport or other document, or combination of documents, deemed by the Secretary of Homeland Security to be sufficient to denote identity and citizenship, for all travel into the United States by United States citizens and by categories of individuals for whom documentation requirements have previously been waived [...]
Just above that, Congress explained why they were adding this requirement:
Findings.--Consistent with the report of the National Commission on Terrorist Attacks Upon the United States, Congress makes the following findings:
(1) Existing procedures allow many individuals to enter the United States by showing minimal identification or without showing any identification.
(2) The planning for the terrorist attacks of September 11, 2001, demonstrates that terrorists study and exploit United States vulnerabilities.
(3) Additional safeguards are needed to ensure that terrorists cannot enter the United States.
The passport requirement was eventually implemented as part of the Western Hemisphere Travel Initiative and took effect on June 1, 2009.
This came about because of the Western Hemisphere Travel Initiative, which in turn arose from a recommendation of the National Commission on Terrorist Attacks Upon the United States, also known as the 9/11 Commission:
WHTI is the joint Department of State (DOS) and Department of Homeland Security (DHS) plan to implement a key 9/11 Commission recommendation and the statutory mandates of the Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA). IRTPA, in part, required the DHS and DOS to develop and implement a plan to require all travelers, U.S. citizens and foreign nationals alike, to present a passport or other acceptable document that denotes identity and citizenship when entering the United States.
The problem here for the US government is that US citizens have an implicit right to enter the US. So in fact anyone who can prove their US citizenship at the border will be admitted, although someone without a specified document should expect to be delayed, perhaps significantly, and there is a decidedly increased risk of refusal if the CBP officers decide that the evidence being presented is of questionable authenticity.
But why does that same US citizen need to reenter the US with a passport?
They don't; they can also use a passport card, enhanced driving licence/state ID or Truster Traveller card, among others. AMong these, the NEXUS card is also accepted by air (if flying from Canada)
Regarding the rules being different; well, the US and Canada are separate countries.