I do not understand why Blogger tells me that I cannot change my layout using the GUI template wizard (add gadgets, use Labels fully, have the "Next Post" / "Previous Post" links, restrict blog access, ...), simply because my blog is not hosted on a Google server. Why do FTP published blogs get second class treatment?with the implication being that Blogger is shortchanging FTP published blogs, to coerce their owners into publishing on a Google server, either to Blog*Spot, or to a Custom Domain.
The answer here is a bit simpler. You can't use a Layouts template, or the GUI features, because a Layouts template is written in dynamic HTML. Dynamic HTML requires that the server with the blog content (ie Blogger) be accessed by the blog reader, as the blog is being read.
When you publish by FTP, to a server distant from Blogger, you are publishing statically. The publishing process sets up the blog on the distant server once, and all access to the blog is against a static image on that server.
One blog post could be displayed as a post page, as part of an archive page, as part of a label search page (and with any number of labels relevant), or as part of the main page - you can't publish all of the possibilities statically. You have to build each page dynamically, based upon the link just clicked on. That requires access to the blog content - and that won't happen with an FTP host server, because the blog content is on Blogger, which is another server far away.
It's not a conspiracy, nor a coercive tactic, just a technical impossibility. If you have a blog with a classic template, consider upgrading your blog to a layouts template. If you are using a classic template because you like HTML based blogs, upgrade to layouts anyway - and combine the layouts template with your current HTML code.