I believe the wheel bearings are actually supposed to be packed with wheel bearing grease, not run in gear oil.
The outer seal (if I remember correctly) seals against the axle flange and prevents gear oil (from the drive axle load tube) from mixing in with the wheel bearing grease.
If you have gear oil in the bearings the outer seal has failed, or the wheel bearings have been running too loose.
The idea of using a seal to keep the axle gear oil out of the wheel bearings is not uncommon. Usually it is done with a seal situated in the inside end of the axle load tube. Hyster just has a different idea.