This ruins the readability and usability of your diffs. Say you need to quickly track down a major bug due to a change in a single constant. With horizontal alignment, the diff might contain any number of changed lines, obscuring the crucial change. There are workarounds that ignore whitespace and word-based diffs, but it's just not worth the trouble IMHO.
The problem I was alluding to occurs when a change causes the amount of alignment spaces to change, which then affects all the lines that have been aligned. Without alignment, the diff would be limited to just the code that was changed.
