I read a while back that it had to do with the huge cultural changes that went into effect when Rutherford took over in the 1910s.
There was a cult of personalty around Russell and his followers tended to dress and groom in his style (beards). Rutherford was clean shaven and his sycophants in turn groomed themselves accordingly in order to show their solidarity with Rutherford (and not with the many Russell followers who were defecting in droves).
In other words, wearing a beard became associated with loyalty to the prior regime, which was being lambasted in the publications as "the evil slave."
Eventually the hippie movement got underway and the antagonism against beards was further solidified in JW culture. There was a tremendous amount of growth in the 1950s and 60s to where the cultural norms of that era calcified with little change with the passage of time. Hence, the desire to see sisters wearing flowery dresses and having men with cheap suits "sell" literature door-to-door like vacuum cleaner salesmen of the era.