Why? It's your job to keep your dog near you and under control at all times. If you fail to do so and allow your dog to approach another without the owners permission you're setting yourself and your dog up for confrontation, you darn sure should prefer I spay your dog with a little water or make noise/gestures to scare it off than what would happen if my dog felt the need to defend herself.
Maybe you missed the context? We are talking about narrow and often steep single-tracks, through heavily forested areas, typically without much opportunity to get off the trail. Except above treeline, lines of sight are very limited and it is easy to turn a corner and run into an oncoming party with little or no warning. When meeting or overtaking other parties, there is no alternative to close proximity. Off-leash dogs are the norm. This is not a great place to bring an under-socialized or reactive dog.
This is also a lot different than Mission Trails or the Cleveland National Forest, Elfin Forest, or SDC open space preserves. The chaparral generally affords long sight lines and plenty of opportunity to get well off the trail, so it is easier to manage poorly socialized dogs in those environments.
As it happens, SOP for my own dogs for when meeting people, dogs, or equestrians on the trail is to sit and allow the oncoming party to pass. When overtaking, it is to heel. When I see that someone is approaching with an under-socialized dog, I try to be diligent about getting off the trail as much as possible, to allow them to pass. This is an opportunity to reinforce my dogs for the desired behavior, work on focus, and (if the handlers have any clue) allow for a desensitization opportunity for the reactive dog. When overtaking (hiking every day, I move more quickly than most) a party with a sketchy dog, I request that they allow room for us to pass. I get a lot of comments about how well trained my dogs are. They don't run up on other dogs, but other dogs frequently run up on us. I have spent a lot of time habituating my dogs to people, bicyclists, dogs, horses, cattle, sheep, goats, and moose.
Having spent a lot of time in the areas the OP is talking about, I can attest that it is very common to encounter off-leash dogs that are not aggressive, but not all are well controlled. That is just a fact of life. If you don't want your dog approached by off-leash dogs, this is not the place to go. It is not a problem for properly socialized dogs.
There is also the consideration that hunting with dogs is very common in the National Forests. Hunting is generally allowed in the NFs, but the hunting regulations are state-specific. For example, in CA it is legal to hunt just about every game species with dogs, except hunting mountain lions with dogs requires a special permit. It is legal in CA to "train" dogs on or off game all year long, except in designated "dog control areas" during the deer season. In NH it is not legal to hunt deer or moose with dogs, but it is legal to hunt most other game species (including black bear) with dogs. There's no closed season in either state on coyotes or squirrels. In both states, it is illegal to interfere with a dog engaged in the legal pursuit of game.
In the National Forests and other public lands where hunting is allowed (e.g., BLM, NH State Parks and State Forest, etc.), one should expect to encounter hunting dogs that are going to be working at some distance from the handler. I run my dogs on game at every legal opportunity. The cur works close, generally within 100 yards. The lurcher typically works within a quarter mile in the chaparral, closer in forest.
So if you have your dog in an area where unleashed dogs are the norm, you have to expect to encounter unleashed dogs. For most of us with well-socialized dogs, this is not a big deal. But an owner engaging in threat displays is a big deal. It turns what should be an innocuous encounter into a confrontation. The threat display is intended as a distance-increasing behavior, but may in fact trigger an otherwise calm dog into an active defense reflex. If you did it with my dogs, you'd find yourself getting bayed up, something we both want to avoid. Squirting my dogs in the face with water is pretty much just an invitation to play, but they would prefer that you had a hose with a jet nozzle for that. It is not a deterrent. My dogs have both worked rabbits and hares, squirrels, opossum, raccoon, deer, bobcat, coyote, and black bear. They hike or hunt every day, and are in excellent condition. Reactive dogs really don't phase them very much.
There is also the large issue of access. Bringing under-socialized/aggressive dogs into areas that are traditionally off-leash areas has a negative impact on the access rights of other users. For example, public lands within the Adirondack Park in NY have always been off-leash, but just recently (last few years) they have implemented and are vigorously enforcing leash requirements in the high peaks region. This is a direct result of too many people hiking with their under-socialized/aggressive dogs, and negatively impacts those of us with well-socialized dogs.