Why wouldn't they? It's space. I can't think of anywhere that open disposal of waste would be MORE appropriate. You can't exactly "pollute" outer space.
Aside from putting garbage into the path of other ships, it's also a waste of material. You cannot simply continue to dump waste into space as you will be removing raw materials without replacing them. You would run into the same problem we have today with raw material scarcity due to throwing things away rather than recycling them.
This hardly seems fitting for a utopian society.
Putting garbage in the path of other ships? Do you have any concept of how vast space actually is?
The Federation is far from a utopian society. They may like to claim they are...but it certainly is not.
The United Galactic Sanitation Patrol takes care of these things.