Bob Adams wrote:

So why isn't prepay valid for all stations out to the end of Zone 6?

Because prepay is only available on National Rail for sections of line
where Underground fares apply; essentially this is any section that
could, as an alternative, the passenger could travel by LU services.
With one or two exceptions. The full list is in the LU conditions of
carriage (http://tube.tfl.gov.uk/content/about/COC.pdf), and is:

Amersham to Marylebone
Finsbury Park to King's Cross/Moorgate
Kentish Town to Moorgate/Elephant & Castle/London Bridge
Richmond to Gunnersbury
Stratford to Custom House
Stratford to Liverpool Street
West Ruislip to South Ruislip
Upminster to Fenchurch Street/Liverpool Street