The intent was to serve as a conservation measure. Sliced bread goes stale (and rots) faster since more of the crumb is exposed to the air. You can keep unsliced bread in a paper bag or a cupboard (e.g. a bread box), whereas sliced bread generally needs something like a plastic or wax paper covering to keep it fresh. Sliced bread was, at the time, a relatively recent invention, having become a national phenomenon in the US only around 1930. Like many other things that were perceived as costly luxuries at the time sliced bread was thought by some to be a greater use of vital resources like plastics than was warranted in war-time. However, the ban only lasted about 7 weeks.

The ban, while a bit silly, was really not that exceptional for the time, however. Many things were rationed, many things were banned, to concentrate production on the war effort. Civilian sales of automobiles and bicycles were halted, for example. Even buying toothpaste in a metal tube was banned (unless you turned in a used tube as a replacement). Things like sugar, tires, and gasoline were strictly rationed.