I recall hearing this before, and I believe that the reasoning was that children are not developmentally ready for the abstraction of algebra. If I recall correctly this is why my gifted classes didn't present pre-algebra before age 11 (when I was in 6th grade).

However, I know that DD's elementary curriculum specifically exposes kids to some algebra concepts as early as 1st grade.

I'm not sure if the original idea was based on Piaget's developmental stages or not.