My friend :: Wendy :: got into a state where she kept misplacing her passport. (I guess she keeps moving it around.) The first time she misplaced her passport and gave up looking for it, she reported it missing and received a replacement. Then she misplaced the replacement, and while searching for it, she found the original. She reported the first passport as found; this keeps the issuing government happy since they can take it off their If Somebody Tries To Use a Passport with This Number, Arrest Her list. But they can't reactivate the original passport, because it takes time for the updated list to propagate all around the world, and it would be bad to be travelling through some remote country and find yourself thrown in prison because they didn't get the word that your passport number has been un-revoked.
Anyway, she gave up looking for the second passport, and applied for another replacement. By this point, the government found itself in a bit of a quandary: Here's a citizen who is legally entitled to a passport but who has also demonstrated a bit of scatterbrainedness. Their solution: Issue a one-year passport. This allows them to fulfill their obligation to their citizens while limiting the damage if the passport is lost yet again.
(Believe it or not, that's the short version of the story. Here's the long version.)