Final answer:
The incorrect reason for wanting an observatory on the far side of the Moon is that telescopes could observe stars during lunar day. Radio astronomy can be done during the day because the Sun's radio brightness is reduced, but optical telescopes cannot observe stars when the lunar sky is bright.
Step-by-step explanation:
The question at hand pertains to the advantages and potentially incorrect reasons for wanting an observatory on the far side of the Moon. Among the options given, the option that is not a major reason for establishing such an observatory is D) Telescopes on the Moon could observe stars even when it is daytime on the Moon. This is incorrect because similar to Earth, when the Sun is up on the Moon, the sky is too bright for optical telescopes to see stars. On the other hand, radio astronomy can be done during the lunar day because the Sun is not especially bright at many radio wavelengths.
The other options mentioned are indeed significant reasons. Telescopes on Earth are limited by their location, hence option A is valid. Option B is accurate because radio transmissions from Earth would not interfere with observations on the far side of the Moon, making it a prime site for radio astronomy. Lastly, option C is also true because Earth's atmosphere blocks out ultraviolet and X-ray radiation which would not affect telescopes on the Moon.