Why?? Don't get into the "Why" because that will just get you to the "Me Too" more quickly.
As for the second part, tell them that it's against federal law for you to manufacture ammo for sale and when they assure you that they won't tell
As for the supply question, just tell them that it's illegal for you to do it for money and free is out of the question because of the time and effort, even if they buy all the components then give them to you, and buy you new dies & shellholders, etc.
When they say that they won't tell anyone, which will absolutely be the next thing out of their mouth, point out that Accidents Happen.
Gun barrels get obstructed and blow up, accidental discharges shoot gun owners or others around them, and people sometimes just have a legitimate need to shoot other people. If any one of those things happened, or something else unforeseeable, someone in authority is going to be putting in some thought about the gun and it's ammo.
When that happens, it might not be them doing the telling.
So not selling it and not giving it away either is completely reasonable and valid. It should be end of discussion, and without anyone seeming The Bad Guy.
If it's not enough, you shouldn't worry about them considering you a jerk about it... who but a jerk would continue to press you after that point?