Strange. Things should be done the same way for internal and external candidates. I still had to interview for fellowship at my home institution even though I had been there for 5 years. Felt forced and artificial, but hard to justify doing things differently as it would unfair to other candidates.
I guess the less fun way of looking at it is that they are telling you that they have seen enough of you to know that they don't really want to interview you because they don't want you in the program. Hopefully for you this is not the case.
