Okay, after looking at the mating surfaces, the answer became obvious. The lip side of the race has an inward bevel. If you were to press the retainer on against the bevel, you'd run the risk of the retainer ring slipping into the bevel and distorting the lip. Therefore, the lip side has to go...
I could really use some help. I'm in the middle of replacing the seals, bearings, etc... I previously paid a shop to do this and it failed. I have a 2001 4Runner and the bearings I just pulled out do not have the lip (maybe this contributed to the quick failure). I've moved, so seeking warranty...
