System.String and new() constraint

Few days ago, my colleague was dealing with code that was loading a list of objects from DataReader. Basically, for every record, a new object was created like this:

T obj = new T();
//set some properties using reflection
result.Add(obj);

Of course, the method had new() constraint for type T. The method name was pretty generic, however the method couldn't handle scalar values like ints, floats, etc. (because it tried to set some properties through reflection). My colleauge changed the code and if the value was a scalar value (IsPrimitive seemed ok for us) the value from reader was casted to T and assigned to obj. My colleague mentioned that this method won't work for String because String doesn't have public parameterless constructor. To be honest, I didn't know that because I have never needed to write something like String str = new String(). I've always written String str = String.Empty. However, it seems really odd that you can't just say new String(). I asked about this issue on stackoverflow: http://stackoverflow.com/questions/2454914/system-string-why-doesnt-it-implement-parameterless-constructor.
I suggest you read this post. Discussion in answers is really interesting.

I asked this question and thought about this issue for few hours. In our particular case, the code was clearly wrong. We created another method for scalar values without new() constraint. However, I still think that lack of public parameterless constructor for System.String is a .NET flaw (yet, as I said, I have never had a need to use it ;)).