As the comments are pointing out, it actually does work for $n=2$.
To see why certain values of $n$ are excluded, you have to look at how the formula is proven.
Probably the formula is proven by integration by parts. We have
$$ \int \sec^n(x)dx = \int\sec^2(x)\sec^{n-2}(x)dx = \tan(x)\sec^{n-2}(x) - \int\tan (x)\frac{d\sec^{n-2}(x)}{dx}dx $$
. The derivative of $\sec^{n-2}(x) = (\sec(x))^{n-2}$ is $(n-2)\sec^{n-3}(x)\sec(x)\tan(x)$ .
Plugging this in gives
$$ \int \sec^n(x)dx = \tan(x)\sec^{n-2}(x) - (n-2)\int\tan^2 (x)\sec^{n-2}(x)dx $$
Now we use the identity $\tan^2(x) = \sec^2(x) - 1$ to make this
$$ \int \sec^n(x)dx = \tan(x)\sec^{n-2}(x) - (n-2)\int\sec^{n}(x)dx + (n-2)\int\sec^{n-2}(x)dx $$
or
$$I_n = \tan(x)\sec^{n-2}(x) - (n-2)I_n + (n-2)I_{n-2}$$
Adding $(n-2)I_{n}$ to both sides gives
$$(n-1)I_n = \tan(x)\sec^{n-2}(x) + (n-2)I_{n-2}$$
Now we get the formula by dividing by $n-1$ -- which we can do for any value of $n$, except $n=1$. (And, of course, I've dropped the $+C$ throughout, but it belongs too.)
So, to answer your question: $n=1$ is special because the division-by-$n-1$ step in the proof won't be possible.