You're absolutely right about this. This is almost certainly just there to block people who mistakenly paste in an example configuration somewhere.
Back in 2010 there were problems that came up when IANA started allocating out of 1.0.0.0/8 (e.g. [1]). Things that were once assumed to be unused started being used, leading to strange issues.
Also, why on earth would AT&T block 1.1.1.1 and not Google DNS and OpenDNS?
[1] https://bgpmon.net/issues-with-allocating-from-1-0-0-08/