Presumably, the intended use of the light is blinking/flashing mode. Steady mode is there if you really want it but the light is not designed around it. Hence the tiny battery.
Not that it would have killed them to put in a decent battery anyway. Cygolite Hotshot 2W weighs 55 g vs. Cateye Rapid 1's 40 g, it's one of the brightest rechargeable USB taillights out there, it lasts 4.5 hours on steady and several days in blinking mode, and it charges in 3 hours vs. Cateye's 4.