It's for your own personal admin, so as to take care of a house, a Job amongst other things these things take time and the army expects you to do this with in that year. So I was told I'm sure someone else will be along with there bit to help out.
If you follow your line, it would also allow the military to give you one month's notice as well. Currently the system can give you 12 months notice, just as you can give it 12 month's notice. If you wish to depart early, apply through your chain of command to APC and if it is possible (they also have a duty of care to ensure you are set for civvie street) then it can be granted.
When you signed up, you agreed to serve under the terms and conditions deemed appropriate by the MOD (which they can change at any time as you did not sign a contract), the MOD decided Soldiers must give one years notice; as previously stated, to give them time to recruit and train a replacement and also give you time to get yourself sorted. Therefore it is both legal and ethical.
Im sure that if you did try to contest it they could drag it out a bit anyway, probably about 12 months or so. There are lots of things that the military put in place that wouldnt stand up in a court of law (return of service for a career course for one) but at the end of the day we all signed up, and signed various other bits of paper through our careers that say we wont do this or that; why should renege on them just because we dont agree when we need to do something else.
The Army also has a self imposed obligation to ensures resettlement process has taken place. The theory is to ensure you do not end up homeless and on the rock and roll. In the present climate people are getting out much more quickly if they need to...
DM(A) can waive the notice period if it makes no sense to hold on to the individual e.g. significant welfare issues, and he/she wants to leave. Also many sign off hastily and then sign back on (if approved) during this extended "period of reflection".