That's right. The flavor is that the creature is in a defensive stance, it can still somewhat defend itself, but can't start moving and acting yet.
And yes, it was for balance. The creatures are a great bargain for continuous ongoing damage, but that one round delay (plus the other rounds it requires to reach the enemy) help make them balanced vs. direct attack spells.
We used to have it where creatures came into play with a guard marker, but that was a little too powerful. The Beastmaster just summoned a new "meat shield" each round and he was very hard to beat!