"Oh, I'm sorry to hear it's not right for you. Could you pass it along to someone at your company it would be a better fit for?" [Grammatically, for the sticklers, that should be "for whom it would be a better fit," but in the interest of capturing the realism of the situation, I've chosen not to use archaic grammar no one would actually SAY. But back to the point now.]
Why does this bug me? A couple reasons.
1) If you don't know who at my company is a good fit for it, I might, on a more bitter-tempered day, wish you'd done that research on your own before submitting it to me.
2) If I passed on your project, and if my reason was that it wasn't right for my list, this might mean (horrors!) I didn't like the project (nothing personal--it does happen, though). Naturally, I'm polite and would never ever tell anyone if I hated their manuscript and would have preferred to use it as kindling to roast myself some S'mores on a dragging August afternoon than waste postage on sending it back to them. At best, I was lukewarm about it (because, let's face it, if I really, really love it, I'll try to coax Robert the Publisher into letting me buy it no matter what my list actually looks like, and even if I failed, the agent/author would know a little more about that journey). So "not right for my list" is a kind of generic rejection that encompasses the whole spectrum of vile hate to lukewarm.
This means that by asking me to pass it along to a colleague, you're putting me in an awkward position. I either have to tell you "Actually... no" point-blank (again, I am really bad at direct rejection and HATE this), or I basically am forced to act as an in-house agent of a work I probably didn't like that much! Awkward. Now *I* have to ask a *favor*--that they read your [possibly crappy] manuscript--of colleagues I would rather save for other favors. Boo.
3) Further awkwardness ensues on the follow-up. Who do you follow up with? Me? So then *I* have to nag my colleagues--who have zero incentive to look at this, since you weren't bothered to contact them directly? I *hate* nagging. Ugh. But *especially* nagging people I like to waste time on something I didn't like! DO YOU SEE THE RESENTMENT BUILDING?! But on the other hand, once I've rejected it once, I can't reject it again *for my colleague* and you just keep calling me! In fact, you might call me and complain about how my colleague isn't responding to you, because you forget that they have literally no incentive!
I am going to go home tonight and work on my fortitude in telling people no. You, in the meantime (you know who you are!!), should go home and work on picking the people you want to submit to yourself, so this whole chain of annoying events doesn't happen.