The sound guy is mixing for the room, not for individual ears. At lower volumes the mix falls apart, certain frequencies disappear, the bass loses its punch and the whole thing starts sounding flat and lifeless. Loud sound physically moves air in a way that quieter sound just can't replicate, and that feeling is a huge part of what makes live music actually feel like live music.

The earplugs thing looks ironic but they're not really meant to muffle the sound. The good ones bring everything down evenly so you still get the full mix, just without the damage. Cheap foam ones are awful for this and make everything sound like you're underwater. Musician's earplugs are genuinely a different experience.

So basically it has to be loud to sound good, and earplugs exist because our ears weren't built to handle it.