Why is Monster Reborn a banned card in Yu-Gi-Oh?

Answer 1

Monster Reborn is a "broken" card in Yu-Gi-Oh! because of its ability to Special Summon any monster card in either player's Graveyard at virtually no cost.

Before current Forbbiden/Limited card lists, Monster Reborn was considered better than Call of the Haunted or Premature Burial because it was an unfair balance of give and take, while Call of the Haunted, and Premature Burial came with a cost (Call of the Haunted had to be Set and then activated the next turn and was vunerable to Spell/Trap destruction cards and cards such as Jinzo and Royal Decree; Premature Burial, although could be activated immediately, still required a cost of 800 Life Points, and was also vunerable to Spell/Trap destruction cards).

However, players started to abuse the return effect of Giant Trunade and were able to reuse the effect of cards such as Call of the Haunted, Premature Burial, and Swords of Revealing Light over and over again (which resulted in the Limiting of Giant Trunade). Another advantage that influenced the banning of Call of the Haunted was its ability to activate even on the opponent's turn. Monster Reborn could not do that. Later, when the new Forbbiden/Limited card list came out, Monster Reborn was switched with Call of the Haunted on the Forbidden section. And the list after that placed Premature Burial right next to Call of the Haunted in the Forbidden list, and Magician of Faith was put there as well to avoid abuse of the newly released Monster Reborn.

Premature Burial was deemed even more abused than Call of the Haunted. Along with Giant Trunade, the newly released Hidden Armory, foreshadowed continued abusive play with Premature Burial which earned it a place on the Forbidden list.

As of the October 2010 Forbidden/Limited Card List, both Monster Reborn and Call of the Haunted are now Limited, with Premature Burial still Forbidden.