Why should you oil the axles of a bicycle?

Well, you shouldn't.

Oil is too runny to do a good job on bicycle bearings. It's better to use grease, which hangs around better.

And putting either oil or grease on the axles doesn't do much. Protects against rust a bit, that's all.

It's in the bearings where you need lubrication - preferably grease - and you want it there to make the wheel move easier.