The passcode enables encryption of the local storage on the iOS device. Without a passcode, if the device is lost the data on it could be accessed by anyone.
"Data protection is a feature available for devices that offer hardware encryption, including iPhone 3GS and later, all iPad models, and iPod touch (3rd generation and later)".
This comes from http://support.apple.com/kb/HT4175
So the difference may be in which iOS hardware version they are using, alternatively, there could be multiple Exchange Server policies in place in AD, and different users could be in different policy groups. If you are sure you want to disable data protection, it can be done in Exchange Server Policies. Here is an article on policy settings