Now, I know the real answer is "because otherwise the story wouldn't work out", but damn it, I want a good in-universe explanation!
(Just as I know the real answer behind Yeerks addressing eachother as binary genders is because it's a lot simpler to read and write than having to make up genderless terms.)
But seriously, according to the laws of the Andalites, Elfangor had no good reason for having the Escafil Device on board his fighter. They all receive the morphing technology in training, so it's not as if it's something that would reasonably be even on the Dome ship. The law of Seerow's Kindness implies strongly that, indeed, carrying the blue box around would be risky if not illegal. Why would you need it? And on a fighter?
Now Elfangor is obviously a special case, but it strains disbelief that he'd think "Hmm, my son needs morphing technology!" or something and smuggle an escafil device on board his fighter.
My personal thought... Well, Elfangor planned to find the Time Matrix on Earth, and go back to change everything. One of the things he might most like to change? Arbron's nothlitism. This serves dual function of an emotional goal -- getting his friend restored -- and a relief of his feelings of guilt and cowardice, as he felt Arbron would make a better war-prince than him anyhow.
(Mind... the Escafil device doesn't actually work on nothlits... But maybe he was planning to modify it somehow with the time matrix? I don't know, it's the best explanation I have so far.)
