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Initially food was not offered but only offered after the person was impressed by the teaching. Therefore this offering is like remuneration, i.e., what an actor might get for an act. The Buddha's intention in preaching is not for worldly gains, so in this case it is not suitable for the Buddha to accept it.
Also when there is a living Buddha, it is said what is offered to the Buddha is not suitable for consumption by other beings. The Buddha with his power of determination destroyed the food so that another being may not consume it as it would have been detrimental to the consumer.
Generally when you put milk rise into a stream it does not fizzle and destroy itself, so anyone seeing such phenomena would be in awe.