Because it is. It is a vigorish on your loan. The bank already has title to the collateral. Why do people have to pay extra on top of what they are already paying?
Because if you don’t put 20% down, as used to be standard in the good old days, there’s too much risk of the borrower ending up underwater and walking away. PMI helps to cover against that, and if you don’t like it you can simply put 20% down.