Summary Answer: Those are interested to benchmark against indexes who sell such index products (pricing data, trade marks, rights to use and publish), and of course portfolio managers because they look generally much better when indexed against indexes than when being assessed through risk-adjusted returns. The general public is sadly just too uninformed to complain much.
Cynical and Winding Answer:
For the precisely same reason than airlines asking you to fasten your seat belts. Its not that a seat belt would make the slightest of differences when a plane crashes, but it makes people feel safe and cared, you know, that warm fuzzy feeling, when during 2008 your investment advisor called you up and cheerfully let you know that his stock picks performed 10% better than the overall market. Unfortunately you lost 40% of your market value.
I take a very critical approach to most motivations by market practitioners in the financial arena. What I have learned early on is that 1-2% are truly smart and outstanding alpha generators, another 8-9% perform vital and important support functions to sustain the 1-2% alpha generators, and all the rest in this industry are like pilot fish around sharks (defined as parasites and those feasting on leftovers). There is a whole indexing service industry subculture where such sales men arrive at your office to tout their latest wares in custom tailored suits, sun-tanned faces, wrist watches twice the size of their arms. The first time you see it you will be amazed, then surprised, and in the end you will run out of the meeting room screaming because you realized that a lot of your retirement and investment portfolios is eaten up by such people. They wine and dine your portfolio managers and he insists along all his colleagues during the daily investment meetings that portfolios must be benchmarked against indexes they themselves choose. A portfolio manager's, or better, fund sales person's worst nightmare is the term "risk adjusted return metrics".
Am I being cynical or bitter? Cynical yes, bitter no, but as soon as you witness just enough of the shenanigans that most in this industry are engaged in you gotta start laughing and smiling a lot more which is often taken as cynicism.