If the weather minima are below that required for the LOC approach the the approach ban applies.
Don't know the politics of the situation however, I expect the reason why the ILS is prohibited for SE aircraft in that case is because the Single Engine Threshold and aiming point is well beyond the ILS touchdown point.
One can't have a precision approach that aims you at the ground some distance before the threshold!
I note that the restriction only applies to piston aircraft. Obvously other single engine aircraft don't need a safety area!!
I believe that that airfield is going to get a heck of a lot of arrivals from the east electing to complete the ILS and then circle.
Regards,
DFC