They're supposedly ripping the bass out of the spectrum by force. (why you remove the bass to get at a high pitched whine is a question for an electrical engineer).

It's not that they're ripping the bass out of the spectrum on purpose, it's just that the cheap ones (like the Radio Shack ones) don't have very good overall frequency response. I would like to see references to other brands that might have better frequency response.

The reason it happens is because they're simply induction coils. (I used to think they were optical isolators, but I've been told otherwise.) Their job is not to pinpoint and eliminate a specific whine. Instead, they fix the ground loop by breaking the connection; physically separating the audio connection so that there's no electrical ground path between the audio source and the amplifier. The lack of full-spectrum frequency response is an unwanted side effect of the components used, but it has nothing to do with the noise removal.

(As I understand it. I could be wrong.)