Why is that? Only a select few are chosen I take it?
Yeah, only a handful (Maybe around 100-200) will actually be selected. That was the purpose of the application to ensure they get a balance of players, playing styles and can weed out those that are only after getting the DLC early (and free) and won't contribute to the actually beta testing itself by making bug reports.
If everyone who applied got the beta, then potentially every xbox player could have got the DLC for free.
Plus a smaller, better controlled group will make it easier to sort out bug reports rather than several hundred bug reports consisting only of 'it crashed!!!'
edit: Plus it'll make it easier to track down and take legal action against anyone that distributes it or leaks details. Part of the terms and conditions included a fairly strict Non Disclosure Agreement from what I understand.