I don't think there is a wrong way to oil micarta. We just use a rag to wipe the scales down before building the knives. I will say that if you've gone through the trouble of taking the handles off to oil them, put them back on the blade before the oil dries back. You definitely want that layer of oil between the blade and the handle.
We oil the kydex for the same reason we oil the handles, to clean them up. The sheaths pick up dust from the manufacturing process or get scuffs in transit. A quick oiling cleans that all up and really makes the colors look nice and crisp. They also don't seem to pick up scuff marks as readily. I thinks it is probably comparable to Armor All in a car.