Without knowing the layout of your Plan it's difficult to say, but experience tells me that requiring dilapidation reports on (only) those Lots that could conceivably be affected by your proposed renovations, including affects due to any structural alterations to load-bearing walls and due to construction activities (e.g. vibration) is a prudent move by your Strata Manager.
However your Strata Manager works for the Owners Corporation (you), so if you think that what's being required is over-the-top, you should immediately put your point-of-view in writing, including any supportive information from your builder, to the Secretary of your Executive Committee (EC), and offer to meet with the EC and your Strata Manger to discuss the matter.
I'd be interested to know the outcome, because whilst dilapidation reports are good “insurance”, they're not legally required unless as part of a Local Government Approval, and there are other options if your EC insists on or supports the Strata Manager's current position.