Why is List<T> not valid on an covariant interface MyInterface<out T>

Follow up question to a previous question, this has been identified as a co-variance issue. Taking this one step further, if I modify IFactory as follows:

class Program
{
    static void Main(string[] args)
    {
        IFactory<IProduct> factory = new Factory();
    }
}

class Factory : IFactory<Product>
{
}

class Product : IProduct
{
}

interface IFactory<out T> where T : IProduct
{
    List<T> MakeStuff();
}

interface IProduct
{
}

I get:

Invalid variance: The type parameter T must be invariantly valid on Sandbox.IFactory.MakeStuff(). T is covariant.

Why is this not invariantly valid? How can/should this be resolved?