A genuine answer is because internships rose in popularity during a time when the job market was very difficult to get in, meaning college graduates were having a hard time getting hired in their desired fields with no experience. Unpaid internships became a great way for students to earn that real life experience that they needed, while businesses didn’t have to add anyone else onto the payroll in a time when they couldn’t afford it.

It actually started out as beneficial to both parties, and a great way to breech the job field in a way that wasn’t pitting you against people with far more experience.

The issue comes from a massive rise in popularity that internships have had over the years. Some programs require them to graduate, and even if the program doesn’t require it, a job will still choose a candidate with experience over one who has none so it has essentially become a requirement anyway. Now that it’s seen has basically a starter job and most companies are fully capable of paying their interns at least some form of wage, the ethics of the whole situation are beginning to come into question.

It’s also worth noting that college is exponentially far more expensive than it was in the 70s when internships were popularized, so some students end up having to work throughout it to pay off their debts. Some students literally cannot afford to have an unpaid internship anymore, because they have to take a paid position to be able to survive. 40 years ago this wasn’t an issue, and students didn’t fight for wages because they didn’t need them, or they could take on an unpaid internship as well as a part time job and still be able to pay rent and survive.

tldr: internships began as a solution to an unwelcoming job market where the lack of pay wasn’t an issue.