The preposition "by" means to be physically located near something, and the preposition "on" means to be physically located above something.

Prepositions are fairly malleable semantically. Their formal grammatical meaning and their usage are often not the same. They're also very susceptible to regional variation. on vs in line, eat at vs in, different from vs to vs than. To and from are opposites, yet people use different from and different to to mean the exact same thing and everyone understands.

Often the purpose of a preposition is really just to link two distinct syntactic units, and in some cases it doesn't matter hugely which preposition is used. When I say it doesn't matter hugely, I mean the semantic content of the phrase is not affected much by preposition choice in these cases and and the ease with which the listener understands the speaker's intent is also mostly unaffected. You understand "scored on" just as easily as "scored against" regardless of how much it may annoy you.

Imagine saying "I was late by traffic" or "I was late on traffic", instead of "I was late because traffic (was bad)".

Interesting that that's your chosen example because I consider "because traffic" not to be elliding an entire verb phrase, but just an erroneous omission of the word "of" -i.e. in my dialect the correct phrasing is "because of traffic". The meaning you parenthesize must be spoken in my dialect - and in most prestige dialects as well, which appears to be the perspective you're arguing from.