Just for the convenience, the incident surface radiance is irradiance by solid angle $L_i=\frac{E}{\omega}$, while the exiting surface is intensity by area $L_o=\frac{I}{A}$. Both have the same unit.

Is this because light may be absorbed by the surface?

@reinaw1012 Consider the situation where a single ray hits point $p_{1}$ from direction $w_{1}$. The only situation where $L_{i}(p_{1}, w_{1})$ equals $L_{o}(p_{1}, w_{1})$ would be if ALL of the energy from the ray reflected back towards the direction without loss. Any other situation (any falloff, any diffusion, any reflection towards another direction) would mean that these two values differ.